It is all risk insurance of projects that covers damages to under construction projects by sudden, and accidental causes. It also covers the damage to the material purchased for the project at the site.

We at UARM offers you a complete and personal ‘one stop shop’ consultancy service specialising in Project insurance.

With extensive specialist experience we will take time to discuss with you all the risks and obligations you have in relation to your project from inception to delivery – taking particular care to understand the size, value, duration and your obligations to funders.

Project insurance policies combine contract works, public liability and can be extended to include Advanced Loss of Profits (ALOPS) and losses due to delay in start-up following any covered material loss or damage. We can also arrange cover for Professional Indemnity Insurance which indemnifies against mistakes and negligence by any architects, engineers or other professionals involved in the project

Broadly speaking a project is exposed to below insurable risks.

  • Fire and Allied Perils
  • Riots, Strike, Malicious & Terrorism Damage
  • Act of God i.e; Earthquake (Fire & Shock), Landslide / Rockslide / Susbsistance, Water Damage. Flood, inundation, storm, tempest, hurricane, tornado, typhoon, cyclone & like natural perils
  • Collapse, Collision, Impact from falling object.
  • Theft & Burglary
  • Third Party Liability
  • Carelessness or negligence

Types of Project Insurance:

  • Contractor All Risk (CAR) Insurance
  • Erection All Risk (EAR) Insurance
  • Marine Cum Erection (MCE) Insurance

Project insurance should cover ‘All risks’ of loss or damage to the permanent and temporary works comprising the contract, including the materials, and all things used for or intended for incorporation within the contract, throughout various phases of the construction / erection, including testing.

The following points need to be considered for Project Insurance:

  • The period of cover will be from the time after the unloading of the property from any conveyance at the site and shall continue until immediately after the first test operation or test loading is concluded (whichever is earlier)
  • Design Defect cover. This will cover the cost of consequences of the damage, but will exclude the defective part itself and any design improvement cost.
  • There should be automatic reinstatement of cover.
  • The policy also contains other extensions (some are sub-limited) vis-à-vis 50/50 clause, a 72 hour clause, extensions of time held covered at terms to be agreed, debris removal, professional fees, plans and specifications, public authorities and expediting expenses.
  • Cost of reproducing plans, drawings and contract documents lost in a claims event, in so far as they are included in the sum insured;
  • Clean-up costs resulting from an indemnifiable loss, which would include costs of removing and disposing off debris, demolition and reinforcing the insured property;
  • Additional costs incurred for overtime, work on Sundays or public holiday etc;
  • Off-site storage / storage at fabricators premises (upto the agreed limit of indemnity)
  • Construction material like scaffolding, shuttering materials.
  • Terrorism is a standard exclusion but it can be covered by taking add on cover


The standard exclusions typically include:

  • Loss or damage due to war or warlike operations.
  • Strike or riot (this can be included in certain circumstances on a case-to-case basis)
  • Terrorism risk, (this can be included in certain circumstances on a case-to-case basis)
  • Damage due to wear and tear
  • Inherent defects
  • Damage due to nuclear energy, radioactive contamination
  • Loss or damage due to wilful act or gross negligence of the insured or his representatives.
  • Cessation of work whether total or partial

Extensions / Add On Covers:

  • Air Freight
  • Express Freight
  • Additional Customs duty
  • Contractors Plant & Machinery (up to 5% of Project Sum Insured or 25 lacs whichever is lower).
  • Storage risk at fabricators premises
  • Clearance and removal of debris.
  • Third party liability
  • Cross Liability
  • Owner’s Surrounding Property
  • Escalation.
  • Free Issue of materials issued by Principal
  • Maintenance Visit or Extended Maintenance visit cover
  • Design Defect Cover