Storage cum Erection Policy

Storage cum Erection Policy

Storage - Cum Erection Policy

  1. SUBJECT MATTER:- All Kinds of Industrial machines/Raw material used for production purposes, within India.
  2. INSURED PARTY:- The Insured party can be a manufacturer, supplier, contractor, subcontractor or owner of the machinery. The policy can be taken jointly by the owner covering the interest of all other parties.
  3. RISK COVERED:- The Policy cover accidental physical loss or damage due to any cause, as under:-
    • Fire, riot & strike & allied perils, sabotage.
    • Natural calamities like Flood, Cyclone, Subsidence, landslide, Rockslide, Inundation, Storm, Collapse.
    • STFI, Earthquake & Terrorism under extension cover has Add on the cover with extra premium.
    • Theft & Burglary
    • Faults during erection, lack of skill/carelessness of workers handling risks
    • Short circuit, explosions, tearing apart on account of Centrifugal forces.
    • Electrical and Mechanical failure during trial & testing.
    • Wear and tear
    • A willful act or gross negligence of the insured
    • Consequential loss of any kind
    • Any contractual liability/under manufacturer’s guarantee.
  5. SUM INSURED (on the following basis)
    • Machinery/equipment’s landed cost at the site
    • Cost of Erection
    • Permanent Civil Engineering works
    • Half escalated value if escalation is opted for.
  6. PERIOD OF COVER: The period of cover is given according to the requirement of the client, from 1 month to 24 months as may be required and it includes usually 1 month testing period for each machine.
    One can select more than 1month testing period up to a maximum of 3 to 12 months by paying an additional premium.
    Testing period available under the policy shall cease to operate with the commencement of the commercial production or with the handing over of the plant to the principal whichever is earlier. In no case, the duration of the testing period shall exceed 12 months.
    • Policy period should be more than 12 months
    • 1st installment should be higher by 5 % of the total premium due under the policy than the rest of the installments.
    • A gap for each installment should not be more than 90 days.
    • The last installment should be collected 6 months before the policy expires and each installment should not have a gap more than 90 days.


    • STFI ( Storm, Tempest, Flood, and Inundation) at the tariff rate Rs.0.225 per million per annum.
    • Earthquake : Zone I : Rs.0.50 per million per annumZone II : Rs.0.25 per milli per annumZone III: Rs.0.10 per million per annumZone IV : Rs.0.05 per million per annum
    • TERRORISM: Rate Rs.0.25 per milli per annum.
    • Third Party Liability cover: The term implies legal liability arising out of property damage or bodily injury suffered by Third parties and occurring in connection with the contract works on or near the building site
    • CLEARANCE AND REMOVAL OF DEBRIS: In the Event of Accidental damage, there will be a lot of debris of damaged plant, which will be required to be cleared before any repairing is carried out and this involves a substantial expenditure. If Insured desires to cover this, he has to specify a limit of indemnity, in proposal form and the same to be mentioned in the policy
    • CIVIL WORKS: The rate as applicable for SCE is to charge the limit of sum insured fixed for S.I. for civil works.
    • ESCALATION: Sometimes an additional sum insured is required for escalation in the values. However, the escalation benefit will be limited to a maximum of 50% of Sum insured of MCE and will be permitted only once at the time inception.
    • SURROUNDING PROPERTY OF THE INSURED: For covering the specified surrounding property of the insured, the art applicable will be 50% of the EAR rate to be charged on the limit of sum insured fixed for the surrounding property.
    • EXPRESS FREIGHT, HOLIDAY AND OVERTIME RATES OF WAGES ( AIR FREIGHT EXCLUDED): Additional rate will be at the basic SCE rate to be applied to the amount selected.
    • AIR FREIGHT: The rate and excess as under shall be charged exclusively for items of Air Freight only on amount selected
      Rate: 5 % on the amount of indemnity selected.
      Excess: 5% on the Air Freight incurred per claim
    • CUSTOMS DUTY( ADDITIONAL): The cover for additional Customs Duty will be subject to the following rates, terms and conditions
      1. The specific limit of additional customs duty either in % or an amount has to be selected by the insured at the inception of the policy and can be reinstated in the event of a loss.
    • CONSTRUCTION PLANT MACHINERY AND EQUIPMENT: Many times a separate Sum Insured is fixed for construction of plant/ machinery and equipment used for such projects. This term implies to Mobile cranes, Tower cranes, Hoists, Scrapers, Excavators, Loaders, Jumpers etc.,When the sum insured on Contractor’s Plant, Machinery and Equipment under a project does not exceed 5% of Sum Insured subject to a maximum of Rs.25 lakhs, the same can be covered under the SCE policy at the applicable rates as per the CPM tariff. Where the sum insured on Contractor’s Plant, Machinery and Equipment’s under a project exceeds 5% of sum insured the same should be covered under the CPM policy, as per tariff.
    • DISMANTLING COVER: The additional rate for dismantling cover will be 60% of the total SCE rate, irrespective of the period of dismantling.
      1. The policy can be extended to cover the Maintenance Visit and Extended Maintenance as per the Tariff rate.
      2. The cover should be granted at the inception of the policy. It cannot be granted just prior to the commencement of Maintenance period.
      3. Extended Maintenance cover could be given for any period longer than 12 months, as required under the contract at the rates prescribed by the tariff.
    • STORAGE RISKS: At fabricators premises workshop @ 0.30 per million per month or part thereof to cover additional transit involve and for the storage at fabricator’s premises.
    • INCREASE IN SUM INSURED: If the sum insured is to be increased during the currency of the policy it can be done at a short period rate.
    • EXTENSION BEYOND POLICY PERIOD: Extension Beyond Policy Period is allowed at the request of the insured and the premium will be charged according to the period required to be extended.

For more information regarding Storage cum erection Poilcy