Construction and erection risk insurance

1) What does a construction and erection all risks policy cover?

A standard construction and erection all risks (CAR/EAR) policy consists of two main sections:

Section 1. Material Damage
Losses incurred by the Policyholder during construction or erection, i.e. damage to the contract works, materials and equipment. Construction machinery, temporary site camps, and property in transit and in storage can also be insured additionally.

Section 2. Third-Party Liability Insurance
Losses relating to the Policyholder's liability to compensate damage to third parties. This may be harm to the life and health of third parties or material damage to third-party property. It is understood that employees of the Policyholder and/or of contractors working on the construction site are not third parties.
The policy may additionally include cover for losses resulting from interruption of construction and delay in commissioning of the construction project.

Section 3. Insurance of Losses Resulting from Interruption of Construction and Delay in Commissioning (Delay in Start-Up)
In the event of an interruption of construction caused by one of the insured events, costs are compensated in the amount of the gross income that the Principal would have earned during the period of operation of the construction project had the delay not occurred.

2) Who can be the Policyholder?
• The Principal (Employer)
• The General Contractor
• Contractors / subcontractors
• other persons who carry out construction and erection works in accordance with the legislation of the Republic of Kazakhstan and have an insurable interest in the construction project, construction equipment, materials and other property used in the construction and erection works.

3) Insured risks
Losses are compensated on an "all risks" basis, i.e. losses resulting from loss of or damage to the insured object caused by any unforeseen and sudden event, in particular (but not limited to) the following risks:

• fire, explosion, lightning, aircraft or objects falling from above;
• tornado, hurricane, typhoon, storm;
• avalanche, mudflow;
• flood, inundation;
• collapse, landslide, subsidence, rising groundwater;
• earthquake;
• malicious acts of third parties, in particular burglary and theft, as well as other malicious damage specified in the policy as insured risks;
• damage to utilities (water supply, sewerage, heating and electricity);
• poor workmanship;
• collapse of the construction project and damage resulting from the collapse;
• other unexpected or unforeseen events on the construction site not separately specified in the insurance policy.

4) Policy period
The policy remains in force until the date specified in the insurance contract, but not beyond the date of completion of the construction works. The policy may also cover the handover/commissioning and testing period, as well as the post-commissioning maintenance (warranty) period.

5) How to find out the estimated cost and terms of insurance.

Complete the attached questionnaire or provide the following information about the insured object:

• Purpose of the construction project;
• Materials of walls, roof and floors;
• Location of the construction site;
• Name of the Principal / General Contractor and the contractor's experience;
• Estimated value of the contract works;
• Use of unique technologies, experimental works, etc.
• Description of the foundation, number of storeys, number of buildings, footprint area;
• Description of nearby buildings and structures