Erection all risks insurance / contractors' all risks insurance
Erection all risks insurance/contractors' all risks (CAR/EAR) insurance covers the company’s installation and construction work and the machinery, structures and supplies required in them. The insurance is suitable for companies practising construction contracting or machinery or equipment installation, for example.
The insurance also covers at least the following:
- Work performance
- Machines, equipment and structures to be installed
- Buildings and non-permanent structures
- Interior design and incomplete installations
- Raw materials and supplies
Tools, working machines and work equipment can also be covered by the insurance by separate agreement. The insurance does not, however, cover mobile working machines, lifts, cranes and other hoists or work rafts and pontoons.
Examples
The insurance may compensate you in the following situations:
- A new building under construction is damaged by fire
- A water fixture breaks and causes water damage to a building under construction
- A precast concrete unit is damaged during lifting
- A piece of equipment being installed falls over or is dropped and damaged
Working Machine Insurance
Working Machine Insurance protects working machines, equipment and other objects of insurance from most typical forms of damage. In addition to the standard accessories of a working machine, piece of equipment or other object of insurance, Working Machine Insurance also covers permanently fitted additional equipment intended for use only in the object of insurance for carrying out various work tasks.
Whenever equipment and additional equipment are not connected to the object of insurance, they are not covered by the Working Machine Insurance. In addition, a working machine, equipment or another object of insurance rented out or lent without a driver is covered by the insurance only if separately agreed.
Comprehensive working machine insurance includes fire, theft, vandalism and motor vehicle (own) damage insurance. In other words, it covers all of the example cases described below with the exception of breakage insurance, which must be taken out separately as an additional cover.
Example: Fire insurance
A mobile chipper worth 400,000 euros fitted on a truck platform self-ignited at the end of the working day due to overheating and chipping dust. The mobile chipper was equipped with an automatic fire extinguishing system approved by the insurance company.
Because the mobile chipper was equipped with an approved automatic fire extinguishing system which put out the fire without any major damage, compensation was paid under the fire insurance, with only the basic deductible payable by the policyholder.
Example: Storm damage
Fire insurance covers damage to a platform that has fallen over when the local wind velocity can be confirmed to have been 22 metres per second or more. The fire insurance deductible will be subtracted from the amount of compensation.
If the platform had been damaged because of a rising water level caused by a storm, such damage would not have been covered by the insurance. If the platform had been covered by Working Machine Insurance that contained motor vehicle (own) damage insurance, damage caused by a rising water level would also have been indemnified.
Example: Theft and vandalism insurance
A locked multipurpose forestry machine is broken into by breaking the windows, and a computer terminal fitted to the machine is stolen. The thief also smears the entire harvester inside and outside with spray paint.
The computer terminal and one window are indemnified under theft insurance. The mess caused is not compensated under theft insurance but rather under vandalism insurance, presuming such a policy has been taken out. If the harvester had not been locked, no compensation would be paid at all under theft insurance or for the vandalism caused to the harvester’s interior.
A simultaneous theft and vandalism loss is indemnified with only one deductible being charged. An insurance combination including theft and vandalism insurance must have been taken out for the machine.
Example: Motor vehicle (own) damage insurance
As the forest tractor (forwarder) operator is loading logs, the log on the grapple hits the cab and damages it. Because the damage to the forest machine was caused during loading, the damage is covered under motor vehicle (own) damage insurance. The exclusion clause concerning damage caused by the machine’s load is not applied to the loss.
Example: Breakage insurance
The drive engines of the owner’s two-year-old track excavator stopped working during transportation. The excavator was taken to the repair shop where the drive engines were disassembled. According to the excavator’s hour meter, it had been used for 6,869 hours. The result of the loss inspection at the repair shop was that the drive engines were beyond repair, owing to internal seizure.
The repair costs of the drive engines were compensated under Breakage insurance, minus the 80% age reduction made on the basis of hours of use.
Working Machine Extra
Working Machine Extra supplements the insurance cover provided by Working Machine Insurance. Property insurance of Working Machine Extra covers accessories owned by the policyholder which are intended to be used in the working machine but separate from it.
Transportation cover of Working Machine Extra covers damage caused directly by the overturning or running off the road of the transportation vehicle, a collision or the collapse of the ground when transporting a non-fixed accessory using another transportation vehicle.
Working machine accessories include the following, for example:
- Various dippers, bulldozer plates, hoes, grab buckets, earth and stump drills, roller sweepers and snow sweepers, etc.
- Mowers, mower conditioners, snowblowers, gritters, washing equipment, etc., not fixed to the working machine.
Working Machine Extra also always includes crisis insurance, which covers acute crisis therapy required by the business owner and employees following a traumatic event.
Example: Lorry and log splitter
A stolen lorry had been used to drive over the fence to a municipal depot during the night. A log splitter mounted on the working machine was stolen from the depot using the lorry’s crane. The surveillance video clearly shows the thieves’ actions. The depot fence met the requirements of the safety regulations on acceptable protection of property. The loss is covered by theft insurance.
Example: Lawn mower
A property maintenance firm noticed one morning that burglars had visited the company during the night. In addition to other movable property, a harvesting lawn mower used with a harvester was stolen from the company’s yard.
There hadn’t been enough room for the lawn mower in the company’s locked storage as a shipment of other materials had arrived unexpectedly last night. Because of this, after work, an employee had pressed a rotary broom mounted to the harvester over the lawn mower and left the harvester parked in the spot.
During the night, the burglars had dug the earth under the lawn mower and used some sort of machine to pull the mower from under the broom as there were clear drag marks on the ground. An employee handed over the photo they had taken of the setup from the previous night to the police to use as evidence.
Although the lawn mower had not been stored in a locked storage, the loss is covered by theft insurance as the company had taken the measures required by the safety regulations to store and protect the mower.
Self-employed persons’ accident insurance
In 2020, more than 19,000 occupational accidents occurred at construction sites, of which about 1,200 to insured self-employed persons (source: Finnish Workers' Compensation Center, 2021). Most accidents in the construction industry occur either during new building construction or in connection with installation and preparation work. In these cases, the work environment is usually a construction site (source: Insurance Centre, 2020)
The most frequent causes of accidents in the construction industry are falling, jumping, slipping and sharp objects. The most commonly injured body parts are the fingers, hands, feet, ankles and eyes. Occupational diseases in the industry are typically caused by mineral dust and noise. In 2020, for example, there were 2,813 diagnosed occupational diseases caused by mineral dust and 1,700 caused by noise (source: Insurance Centre, 2020).
Although the numbers of occupational accidents and diseases in the construction industry have fallen in recent years, the industry is still fairly prone to occupational accidents and has the most occupational diseases per capita of all industries (source: Insurance Centre, 2020).
For these reasons, self-employed persons in the construction industry should consider self-employed persons’ accident insurance. Self-employed persons’ accident insurance covers bodily injuries caused by occupational accidents and diseases and leisure-time accidents. The insurance can only be taken if you have a valid self-employed persons’ pension insurance (YEL).
Self-employed persons’ accident insurance may cover the following, for example:
- Medical treatment and examination costs
- Travel expenses relating to medical treatment
- Per-diem allowances for the period of disability
- Rehabilitation expenses
- Losses incurred from a permanent injury
- Disability pensions in the event of a permanent disability
Business liability insurance
Business liability insurance covers bodily injury or material damage caused to another party by your company’s operations. The insurance is important particularly in the construction industry, as the client of a project often demands proof of valid business liability insurance before work can begin. This is to ensure that the contractor is able to meet the obligations put forward in the Tort Liability Act if a loss event occurs.
Example: Lifting accident
A mobile crane is lifting concrete slabs from a lorry’s platform. During a lift, a concrete slab falls over a passenger car in the adjacent car park. The cause for the damage is that the loop from which the slab was raised had broken off, owing to a casting fault. Business liability insurance covers the damage to the third party’s passenger car.
Construction business owner – ask for an insurance offer
Whether you are a new or experienced construction industry entrepreneur, we are always ready to help you identify and select the right insurance for you. Contact us by using the request for offer form below, and our experts will help you find the most suitable insurance for your construction business.