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CAR/EAR, Machinery breakdown, Electrical equipment, CPE/CPM.

Contractors’ all risks (CAR) insurance

The CAR covers almost any sudden and unforeseen loss or damage occurring during the period of insurance to the property insured on the construction site as well as against third-party claims in respect of property damage or bodily injury arising in connection with the execution of a construction project. The most important causes of losses indemnifiable under CAR insurance are:
  • Fire, lightning, explosion
  • Flood, inundation
  • Windstorm of any kind
  • Earthquake
  • Theft, burglary
  • Bad workmanship, lack of skill, negligence, malicious acts or human error

The cover provided by CAR insurance is subject only to a few standard exclusions which the international insurance market usually applies.

Erection all risks (EAR) insurance

It covers almost any sudden and unforeseen loss or damage occurring to the property insured on the erection site during the period of insurance. The insurer will indemnify loss or damage due to the following causes:
  • Fire, lightning, explosion
  • Flood, inundation
  • Windstorm of any kind
  • Earthquake
  • Theft, burglary
  • Faults in erection
  • Negligence, lack of skill, lack of experience, malicious acts
  • Short-circuit, arcing, excess voltage
  • Excess pressure or vacuum, tearing apart on account of centrifugal force
  • Any other sudden and unforeseen event such as loss or damage due to collapse, foreign objects, on-site transport of items to be erected, etc.

Terms and conditions to apply are as Munich Re policy wording.

Electronic equipment (EE) insurance

Electronic equipment insurance is an "accident" insurance on an all risks basis covering sudden and unforeseen losses which physically affect the subject matter insured (electrical and electronic systems) such as:
  • Electronic data processing (EDP) equipment
  • Electrical equipment for medical use
  • Communication facilities
  • Lighting and navigation facilities
  • Equipment for research and materials testing

The insurer will indemnify loss or damage due to the following causes:
  • Fire, lightning, explosion, failing aircraft
  • Smoke, soot, corrosive gases
  • Water and humidity
  • Failure of air conditioning
  • Short circuit and other electrical causes
  • Design, manufacturing, assembly and erection faults, defects in casting and material, workshop errors, bad workmanship
  • Faulty operation, lack of skill, gross negligence
  • Malicious acts of workmen, employees, third parties
  • Burglary
  • Hail, frost

Contractors’ plant and machinery (CPE/CPM) insurance

It covers unforeseen and sudden physical loss of or damage to the insured items (plant, machinery and mechanical equipment at work, at rest or during maintenance operations) necessitating their repair or replacement. It is an all risks "accident" machinery due to one of the following causes:
  • Faulty design (calculations, plans, drawings and specifications)
  • Faults at workshop or in erection
  • Defects in casting and material
  • Faulty operation, lack of skill, negligence, malicious acts
  • Tearing apart on account of centrifugal force
  • Physical explosion, flue gas explosion in boilers
  • Electrical cause s such as short circuit
  • Shortage of water in boilers
  • Storm, frost, drifting ice

All types of machinery, plant, mechanical equipment and apparatus may be covered under machinery insurance.
If possible, all the machines of a plant or workshop or of a separate plant section should be included in the insurance in order to ensure that the risk is adequately balanced.

Only those items having a short service life compared with the entire plant are normally excluded from machinery insurance, these are mainly:
  • All types of interchangeable tools
  • Belts, chains, ropes, sieves, engraved cylinders, stamps, dies
  • Parts made of glass, ceramic or wood, rubber tyres
  • Operating media of any kind such as fuel, gas, refrigerants, catalysts, liquids, lubricants (oil in transformers and circuit breakers is, however, included since it is not only a coolant but also serves as an insulation agent)

The few individual exclusions from the cover mainly comprise loss or damage caused by:
  • Fire, lightning stroke, chemical explosion, burglary and theft, i.e. perils covered or coverable under other policies such as collapse of building
  • Inundation, flood, earthquake, subsidence, landslide, impact of landborne, waterborne or airborne craft
  • War or warlike operations, civil commotion of any kind as well as acts on the part of strikers and lockedout persons
  • Willful acts or gross negligence on the part of the insured or of his representatives
  • Faults or defects existing at the time of commencement of the insurance which ought to have been or were known to the insured
  • Faults or defects for which the supplier is responsible either by law or under contract (losses covered by warranty)
  • Nuclear reaction, nuclear radiation or radioactive contamination
  • Also excluded is consequential loss or liability of any kind or description and wear and tear as a consequence of ordinary use or operation as well as cavitation, erosion, corrosion (e.g. rust) or boiler scale (this exclusion relates, however, only to the parts immediately affected).

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