Engineering insurance is growing in India due to rapid industrialisation. The machines are exposed to accidental breakdown or unforeseen damage. There are hearty costs involved and third party liability. There are two main types of engineering insurance.

Construction and operational policies. The origins of engineering insurance goes back to Industrial Revolution in U.K. Due to frequent explosions of boiler, heavy losses to property and life occurred. The Manchester Steam Users Association was formed in 1854 to prevent losses occurring due to explosions.

Eventually, the Steam Boiler Assurance Company was formed in 1858. New India Assurance Company Ltd. started engineering insurance for the first time in India followed by other general insurance companies Engineering experts are appointed by the insurance companies for evaluating risk and rate fixing.

Underwriting:

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Proposal form and questionnaire are fulfilled by the proposer, which is inspected by the inspector of the company.

The proposal form includes name and address of the principal contractor and sub contractor, full description of the contract construction nature, location, special risk involving earthquakes etc. sum assured material used, limit of accident period of insurance third parties liabilities.

The hazards of special types are assessed with foundations materials of installation/erection, tall building possibilities of scaffolding fire, and contact with air craft. Underground risks are also assessed, pipelines, tunneling, hydro electric, road construction, reservoirs, bridge construction and so on.

Types of Policies :

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There are two main engineering insurance policies construction policies and operational policies. The construction policies are issued for the period of the project i.e., one time policies and the operational policies are issued for one year with new able facility.

Construction Policies:

1. Contractor’s All Risks (CAR) Policy.

2. Erection All Risk (EAR) policy.

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3. Storage cum erection (SCE) Policy.

4. Marine Cum Erection (MCE) Policy.

5. Contract Works (CW) Policy.

6. Advance Loss of Profits (ALOP) policy.

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7. Delay in Startup (DSU) policy.

Operational Policies :

1. Machinery Insurance (Ml) Policy.

2. Machinery Breakdown (MB) Policy.

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3. Boiler and Pressure Plant (BPP) Policy.

4. Machinery Loss of Profits (MLOP) Policy.

5. Contractor’s Plant and Machinery (CPM) Policy.

6. Civil Engineering Complete Risks (CECR) Polity.

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7. Electronic Equipment (EE) Policy.

8. Deterioration of Stocks (DOS) Policy.