Civil Engineering Completed Risks Insurance: Coverage, Eligibility & Exclusions

Updated: 27-06-2022 16:19:12 PM

Development and growth has led to construction at a large scale; however, with such big constructions also come big risks. To overcome the monetary loss associated with any damage to these constructions, you can opt for Civil Engineering Completed Risks Insurance.

What is Civil Engineering Completed Risks Insurance?

Civil Engineering Completed Risks Insurance is a part of the property and miscellaneous insurance that offers coverage for loss or damage to bridges, water reservoirs, canals, jetties, tunnels, runways and water pipelines.

Types of Civil Engineering Completed Risks Insurance

Civil Engineering Completed Risks Insurance (CECR) is a new form of insurance in the market. This insurance policy is available in following two forms:

• Named-perils coverage: This policy covers the insured against any unforeseen and sudden damage which requires replacement or repair. Damage caused by fire, storms, earthquakes, strikes, terrorist activities and strikes are included in this plan type. Here, the insured must prove that the damage is caused by one of the issues mentioned in the policy.
• All-risk coverage: This policy covers the insured both against damage caused by accidents or human error and by natural calamities. Under this policy, the insured just informs the insurance company about the damage. The insurance company then collects the evidence that the damage is according to the coverage provided in the policy.

Read More: What is Commercial Insurance – Coverage, Claim & Exclusions

What all Civil Engineering Completed Risks Insurance Covers?

Repair or reinstatement expenses of the damaged structure caused by:

• Fire
• Lightning
• Explosion/implosions
• Water or air borne vehicles
• Riots/strikes/terrorism and malicious activities
• Natural calamities like storms, floods, wave action of water

The policy holder can pay some additional premium to cover expenses related to:

• Expediting costs
• Removal of debris
• Consequential loss
• Machinery breakdown

How Civil Engineering Completed Risks Insurance Functions?

Applying for the civil engineering completed risks insurance policy is a hassle free process. You can follow the below mentioned steps to get the policy:

• A duly filled in application form along with property details are submitted
• The insurance company checks the property and decides if the applicant is eligible for the policy
• If the property is eligible for insurance, the premium is calculated and agreed between both the parties
• In case of any eventuality, the policy holder informs the insurance company about the issue
• The claimant submits the required documents to the insurer
• An investigator from the insurance company visits the site and verifies the claim
• If the claim is according to the policy, the compensation is paid to the beneficiary account
• If the claim is not as per the policy, it is rejected. The claimant is intimated about the same

Eligibility Criteria 

Civil Engineering Completed Risks Insurance can be taken by:

• Private contractors
• Government or state entities
• Joint ventures, Public Private Partnerships (PPP) as requested by the banks or lenders

Civil Engineering Completed Risks Insurance Claim Process

If there is any damage to the property, the claimant must follow the below mentioned steps to get compensation under Civil Engineering Completed Risks Insurance:

• The insurance company needs to be immediately informed about the eventuality
• Preserve the damaged parts as a proof of the eventuality
• Furnish all the required documents and information to the insurer
• Inform police authorities, in case there is a theft or burglary
• A representative from the insurance company inspects the site
• The representative submits the final report within 30 days of his/her appointment
• If the claim is according to the policy terms and conditions, the compensation is paid
• If the insurance company rejects the claim, the same shall be intimated to the claimant
• If the insured is not satisfied with the resolution, the case can be taken to the court of law

Documents Required for Claim Process

For settling a claim regarding Civil Engineering Completed Risks Insurance, the following documents must be submitted:

• Duly filled in claim form
• List of damaged equipment
• FIR report, in case there is a theft
• Photocopy of the insurance policy
• Estimate of repair or replacement cost

How Long Does it Take to Pay Out a Claim?

The insurance company settles the claim within 30 days of being informed about the same.

Cases Where You Can’t Claim Civil Engineering Completed Risks Insurance (Exclusions)

The Civil Engineering Completed Risks Insurance does not cover loss or damage caused due to:

• Theft
• Political risks
• First amount of loss
• Lack of maintenance
• General wear and tear
• Nuclear explosions or reactions
• Willful negligence of maintenance activities
• Existing defects before the policy commencement
• Subterranean fire or burning of property by order of any public authority

Companies offering Civil Engineering Completed Risks Insurance in India

Development brings with itself an improvement in infrastructure and a lot of construction, which also entails big risks. To overcome these problems, one should be prepared in advance so that work can be carried on unhindered, and the company concerned does not have to bear the losses. In India, one can see the fast pace of growth and construction, and thus the need of Civil Engineering Completed Risks Insurance. Some of the companies providing this insurance in India are:

• HDFC Ergo
• Bajaj Allianz
• United India Insurance Company
• Oriental Insurance

Important Aspects

Here are some aspects related to Civil Engineering Completed Risks Insurance which policyholders must consider before purchasing the insurance:

• Sum insured might increase every year to cover the increasing expenses for existing structures
• Sum insured for the policy also depends on the age and condition of the property
• If the insurance company fails to settle the claim within 30 days, they will be liable to pay the interest
• If the same losses are covered through any other insurance policy, the insured will not be able to claim the same under Civil Engineering Completed Risks Insurance
• The insurance company must be made aware of any change in contact details
• The Civil Engineering Completed Risks Insurance is not considered as a replacement of regular maintenance activities
• Underwriting assessments and chances of long term exposures for infrastructural risks are considered while calculating the premium of this policy
• Policy covers only material damage to the property

Advantages of Buying Civil Engineering Completed
Risks Insurance

This insurance policy is beneficial to people who are involved in major building projects. Some of the advantages of this insurance are:

• It provides coverage against external hazards for which the contractor is not responsible
• Saves the contractors from extreme losses or heavy repair costs

FAQs

Q1. What is the sum insured of Civil Engineering Completed Risks Insurance?

Sum insured is the replacement value of the bridges, water reservoirs, canals, jetties, tunnels, runways and water pipelines.

Q2. What is the premium amount for Civil Engineering Completed Risks Insurance?

Premium depends on the nature, type and location of construction.

Q3. Is there any excess charged under Civil Engineering Completed Risks Insurance?

There is a compulsory excess that is charged under this policy.

Q4. What is the policy period for Civil Engineering Completed Risks Insurance?

12 months.

Q5. When can the insurance company cancel Civil Engineering Completed Risks Insurance?

The policy can be cancelled by the insurer if there is any fraud declaration, misrepresentation, non-disclosure of material facts or non-cooperation from the insured.

Q6. Within how many days the claim needs to be intimated to the insurance company?

14 days.

Q7. Is Civil Engineering Completed Risks Insurance applicable for new constructions?

No, the policy is applicable only to existing constructions.