The installation of industrial machinery, mechanical plant, steel structures, and electrical systems presents a category of risk that a standard construction policy is not designed to address. The equipment involved is high-value, the technical complexity is significant, and the exposure during assembly, testing, and commissioning is materially different from the exposure on a civil engineering project.
Erection All Risk (EAR) insurance is the specialist cover designed for this environment. We administer EAR policies on behalf of brokers placing engineering insurance for clients involved in mechanical and industrial installation projects.
Placing EAR cover for an upcoming project Call us on +27 11 482 9288 or contact us here.
An EAR policy provides all risks indemnity for physical loss or damage to the works during the erection, installation, and commissioning of machinery, plant, mechanical and electrical equipment, and steel structures.
Cover typically applies from the moment insured items arrive at site and extends through the full installation period — including storage on site, assembly, testing, and commissioning — until the completed installation is handed over to the principal.
The two main sections of a standard EAR policy are:
Section 1 — Material Damage
Covers sudden and accidental physical loss or damage to the contract works, including machinery, equipment, and materials forming part of the installation. The sum insured is typically based on the full replacement cost of the insured items, including freight and any applicable duties and installation costs.
Section 2 — Third Party Liability
Covers the insured’s legal liability for bodily injury to third parties and damage to third party property arising from the erection operations. This section is particularly important on projects where the installation is taking place within or adjacent to an operational facility.
One aspect of EAR cover that is worth discussing with clients at inception is the maintenance period extension.
Once the installation is complete and handed over, the principal typically requires a maintenance period — a defined period during which the contractor remains responsible for defects and damage arising from faulty workmanship or materials. A standard EAR policy can be extended to cover this period, protecting the contractor against claims that arise after handover but within the agreed maintenance window.
The length of the maintenance period varies by contract. In our experience, brokers who do not confirm this at inception often find the client is uninsured during a period when defect-related claims are most likely to emerge.
Need guidance on structuring EAR cover for a specific project? Speak to our team.
EAR and CAR insurance are related but not interchangeable. Understanding which policy is appropriate for a given project is fundamental to correct placement.
A Contractors All Risk policy is designed for civil and building construction projects — roads, bridges, buildings, earthworks, and similar contract works. An Erection All Risk policy is designed for projects where the primary activity is the assembly, installation, or commissioning of mechanical or electrical plant, machinery, or industrial equipment.
The distinction matters because the risk profile is different. EAR projects typically involve high-value imported machinery, complex technical processes, and testing and commissioning phases that carry specific exposure not addressed in a standard CAR wording.
Some underwriters offer a combined CAR/EAR product where a project involves both construction and installation activities. Where a contract has a significant mechanical or electrical installation component alongside civil construction works, a combined policy is often the more appropriate solution.
One misconception we frequently encounter is the assumption that an existing CAR policy automatically extends to cover mechanical installation work. It does not. Brokers placing cover on mixed contracts should confirm explicitly whether the policy wording accommodates both exposures.
EAR insurance is most commonly placed on projects involving:
Power generation installations including diesel plants, solar farms, wind energy facilities, and battery storage systems. Industrial plant and processing facilities. Water and wastewater treatment facilities. Telecommunications infrastructure including mast and tower erection. Manufacturing and fabrication plant. Refrigeration and HVAC system installations. Mining and processing equipment. Substations and high voltage electrical infrastructure.
The common thread is the assembly and commissioning of high-value mechanical or electrical equipment where damage during the installation phase would result in significant financial loss and project delay.
If you are placing cover on any of these project types, we can assist. Call us on +27 11 482 9288 or contact us here.
EAR is a technical class that requires more detailed underwriting information than most standard commercial lines. Brokers placing EAR cover should expect underwriters to require:
A full description of the project scope and the nature of the equipment being installed. The contract value and the value of the principal equipment at replacement cost. The project timeline including the anticipated testing and commissioning period. Details of any maintenance period specified in the contract. The identity and experience of the principal contractor and key subcontractors. The location of the project and whether it is within or adjacent to an operational facility. Whether imported equipment is involved and whether transit cover is required from the port of entry.
The sum insured on an EAR policy should reflect the full replacement cost of the insured items, including freight, any applicable duties, and installation costs. Underinsurance on an EAR policy carries the same average clause consequences as any other engineering policy — a proportional reduction in the claim settlement.
EAR is a class where the placement detail matters as much as the policy wording. We work with brokers to structure EAR cover correctly from the outset — ensuring the scope of cover matches the project, the sum insured is appropriate, the policy period covers the full installation and commissioning phase, and the maintenance period extension is included where the contract requires it.
When you place EAR business through us, we handle quotations, policy documentation, mid-term adjustments when project timelines change, and claims coordination if an incident occurs during the installation period.
Polico Africa is registered with the FSCA as a Financial Services Provider (FSP 4598). We administer EAR cover as part of our specialist engineering insurance offering.
Ready to place EAR business with a specialist administrator?
CAR insurance is designed for civil and building construction projects. EAR insurance is designed for projects involving the erection, installation, and commissioning of mechanical or electrical plant, machinery, or industrial equipment. The two covers address different risk profiles and are not interchangeable, although some underwriters offer a combined product for projects that involve both.
Yes. A standard EAR policy extends through the testing and commissioning phase of the installation.
After handover, the contract typically requires the contractor to remain responsible for defects arising from faulty workmanship or materials for a defined period. The maintenance period extension covers the contractor's liability during this window. It is not automatic and must be specifically included at placement.
The sum insured should reflect the full replacement cost of the insured equipment, including freight, applicable duties, and installation costs.
Third party liability cover is included as a separate section in most EAR policies. It covers the insured's legal liability for bodily injury to third parties and damage to third party property arising from the installation operations.
Still have questions? Contact us and let’s chat.
If you are placing Erection All Risk cover for a mechanical or industrial installation project and need a specialist administration partner, we would welcome the conversation. CONTACT US NOW.
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