Erection All Risks (EAR) Insurance: The Complete UK Construction Guide

What is Erection All Risks (EAR) insurance?

Erection All Risks (EAR) insurance is a specialist construction insurance policy designed to protect projects where the main exposure is the installation, erection, testing and commissioning of plant, machinery, steelwork, mechanical and electrical systems, and other engineered components.

In plain English: if you’re assembling, installing, or commissioning something valuable on a site—and a fire, collapse, impact, theft, or other sudden event damages the works—EAR insurance is the policy that can step in to pay for repair or replacement (subject to terms, excesses, and exclusions).

EAR is closely related to Contractors’ All Risks (CAR) insurance. CAR is typically used for general building works (groundworks, structure, fit-out), while EAR is commonly used for engineering-led projects (industrial installs, M&E-heavy builds, renewables, manufacturing plant). Many insurers and brokers treat them as part of the same family of “project all risks” covers.

EAR vs CAR: what’s the difference?

While there’s overlap, the difference is usually about the nature of the project:

• CAR (Contractors’ All Risks): Building and civil engineering works, including materials, contract works, and often existing structures (if specified).

• EAR (Erection All Risks): Erection/installation of plant and machinery, including testing and commissioning phases.

In reality, many projects are mixed. A new facility might involve civils and a major machinery install. In those cases, cover can be arranged as:

• A combined CAR/EAR policy

• A project policy with EAR wording for the engineering elements

• Separate policies for different scopes (less common, but sometimes used)

The key is making sure the policy wording matches the risk profile—especially around testing, commissioning, and defects.

Who needs EAR insurance?

EAR insurance is relevant for any business involved in installing or erecting high-value systems or engineered structures. Common examples include:

• Mechanical and electrical (M&E) contractors

• Engineering contractors and principal contractors delivering engineered projects

• Renewable energy installers (wind, solar farms, battery storage)

• Industrial plant and machinery installers

• Steel erection contractors

• Lift and escalator installers

• HVAC and refrigeration contractors on large projects

• Manufacturers installing equipment at client sites

• Project owners/developers who want a single project policy

If your contract requires “all risks” project cover, or you’re working on a site where a single incident could cause six-figure (or seven-figure) damage, EAR is worth considering early.

What does EAR insurance typically cover?

EAR is often described as “all risks” cover, but it doesn’t cover everything. It generally covers sudden and unforeseen physical loss or damage to the insured works during the period of insurance.

1) Contract works (the works being erected/installed)

This is the core of EAR: protection for the project itself, including:

• Plant and machinery being installed

• Steelwork and structural components

• Mechanical and electrical systems

• Materials and components on site

• Temporary works (if declared and included)

Cover usually applies while items are:

• On site

• In the course of erection/installation

• Undergoing testing and commissioning (if included)

2) Third-party liability (often included or added)

Many EAR policies include (or can be extended to include) public liability for accidental injury or property damage to third parties arising from the project activities.

This matters because a loss event rarely stays contained. A dropped load, a fire, or a collapse can damage neighbouring property or injure members of the public.

3) Optional extensions (common add-ons)

Depending on the insurer and project, you may be able to add:

• Testing and commissioning cover (critical for engineered projects)

• Maintenance period cover (defects liability / maintenance visits)

• Off-site storage (for components stored away from the main site)

• Inland transit (moving components to site)

• Debris removal

• Professional fees (architects/engineers fees linked to reinstatement)

• Expediting expenses (overtime, express freight to reduce delay)

• Surrounding property / existing structures (where relevant)

• Tools and plant (usually separate, but sometimes arranged alongside)

4) What about delay and loss of revenue?

EAR is primarily about physical loss or damage. If you need protection against financial loss due to project delay following insured damage, you may need:

• Delay in Start-Up (DSU) / Advanced Loss of Profits (ALOP) cover

This is specialist and heavily underwritten. It’s most common on large infrastructure, energy, and industrial projects.

What EAR insurance usually excludes

Exclusions vary by insurer and wording, but common ones include:

• Wear and tear, gradual deterioration, corrosion

• Faulty workmanship or defective design (often excluded, with limited “resultant damage” cover)

• Mechanical or electrical breakdown (unless it results from an insured external event)

• Consequential loss (e.g., penalties, liquidated damages, loss of profit—unless DSU/ALOP is purchased)

• War, terrorism (terrorism may be available separately)

• Nuclear risks

• Known defects or pre-existing damage

• Contractual liabilities beyond common law

A key area to watch is the “defects” exclusion. Many policies exclude the cost of rectifying the defective part itself but may cover damage caused to other insured property. The difference can be significant in a claim.

The EAR policy period: when does cover start and end?

EAR is typically arranged for a defined project period. Cover commonly starts:

• When materials are unloaded at the site, or

• When erection/installation begins

And ends:

• On completion/hand-over, or

• After testing and commissioning, or

• After a defined maintenance period (if included)

Maintenance periods explained

Many contracts include a defects liability period (e.g., 12 months). EAR can sometimes be extended to cover:

• Visit maintenance: cover for damage caused while you’re on site performing maintenance

• Extended maintenance: cover for damage arising from the works during the maintenance period (more limited and underwriting-heavy)

If your contract requires a maintenance extension, clarify which type is needed.

Typical EAR claims (real-world scenarios)

EAR claims tend to be high severity because the insured items are expensive and the work is specialised. Examples include:

• A crane incident damages installed steel sections and M&E equipment

• Fire during hot works damages partially installed plant

• Flooding damages electrical systems during fit-out and commissioning

• Theft of copper and components from a secured compound

• Collapse of temporary supports during erection

• Damage during testing/commissioning due to an external event (e.g., power surge following a site incident)

The common thread: sudden, unforeseen events that physically damage the works.

What affects the cost of EAR insurance?

EAR pricing is project-specific. Insurers typically look at:

• Project value (contract works sum insured)

• Project duration (including testing and maintenance)

• Type of works (industrial plant, renewables, heavy M&E, steel erection)

• Location and site conditions (flood exposure, security, neighbouring property)

• Contract structure (who is responsible for what)

• Claims history of the contractor and principal

• Risk controls (hot works procedures, lifting plans, security, fire protection)

• Testing/commissioning complexity

In general, higher-risk activities (heavy lifts, complex commissioning, high fire load, remote sites) increase premium and may increase excesses.

What information do insurers need for an EAR quote?

To get accurate terms, you’ll normally be asked for:

• Project description and scope of works

• Contract works value and breakdown (materials, labour, plant)

• Start and end dates (including testing and maintenance)

• Location(s) and site details

• Principal contractor and subcontractor details

• Method statements / risk assessments (especially for high-risk tasks)

• Details of lifting operations and major plant

• Hot works controls and fire protection

• Security arrangements (fencing, alarms, guards, storage)

• Any existing structures or surrounding property exposures

• Previous claims and loss history

The more complete the submission, the better the chance of broad cover and sensible excesses.

Key clauses to check before you buy

EAR policies can look similar on the surface but behave very differently in a claim. Pay close attention to:

• Testing and commissioning clause: is it included, and for how long?

• Defects exclusion wording: what’s excluded vs what’s covered as resultant damage?

• Basis of settlement: reinstatement vs indemnity, and any average clause

• Excesses: separate excesses for theft, flood, escape of water, and testing

• Security conditions: minimum requirements for theft cover

• Hot works conditions: compliance requirements and permits

• Subcontractor cover: are subcontractors automatically included?

• Cross liability: important where multiple insured parties are named

• Off-site storage and transit: included or excluded?

• Existing property: is it insured, and to what limit?

If you’re working under a JCT, NEC, or bespoke engineering contract, align the insurance clauses with the contract requirements.

EAR insurance and contractual responsibilities (UK projects)

On UK construction projects, insurance responsibilities are often set out in the building/engineering contract. Depending on the contract form and negotiation, EAR might be arranged by:

• The employer/project owner (a single project policy covering all parties), or

• The main contractor, or

• A specialist subcontractor (less ideal if multiple parties need protection)

A single project policy can reduce disputes about “whose insurance should respond” after a loss, but it must be properly structured with:

• Correct insured parties (principal, contractors, subcontractors)

• Cross liability wording

• Clear limits and scope

Risk management tips to reduce claims (and improve terms)

Insurers like projects that are controlled. Practical steps that can reduce incidents and improve your terms include:

• Formal lifting plans and competent appointed persons for crane operations

• Hot works permits, fire watch, and correct extinguishers on site

• Good housekeeping and segregation of combustibles

• Weather and flood planning (temporary drainage, storage off the ground)

• Secure storage for high-theft items (copper, tools, components)

• Documented testing procedures and sign-offs

• Clear change control for design and installation modifications

These measures won’t just help with premium—they can prevent a claim that derails the whole project.

How to choose the right EAR policy

A good EAR policy is less about “cheapest premium” and more about avoiding gaps that only show up after a loss. A practical approach is:

1. Confirm the contract insurance requirements (who arranges, what limits, what periods).

2. Define the project phases (installation, testing, commissioning, handover, maintenance).

3. Set the correct sum insured (full reinstatement value, including materials and labour).

4. Add the right extensions (transit, off-site storage, debris removal, professional fees).

5. Check exclusions and conditions (defects, testing, security, hot works).

6. Make sure liability cover is adequate for the site environment and third-party exposure.

Frequently asked questions (FAQ)

Is EAR insurance legally required in the UK?

No. EAR insurance isn’t a legal requirement, but it is commonly required under contract and often essential for protecting high-value works.

Does EAR cover my tools and plant?

Usually not as standard. Tools and plant are typically covered under a separate Contractors’ Plant and Tools policy, though some project placements can be coordinated.

Does EAR cover design defects?

Most policies exclude the cost of rectifying the defective design itself. Some may cover resultant damage to other insured property. The exact outcome depends on the defects exclusion wording.

Does EAR cover theft from site?

Often yes, but theft cover is commonly subject to strict security conditions (fencing, locked containers, alarms, guards). If conditions aren’t met, theft claims can be declined.

Can EAR include public liability?

Yes—many placements include third-party liability, or it can be added. Make sure the limit matches the project’s exposure.

What happens if the project overruns?

You’ll usually need to extend the policy period. If the project runs past the end date without extension, you can be left uninsured.

Next steps: get EAR insurance that actually works when you need it

EAR insurance is one of those covers you only truly value when something goes wrong—so it’s worth getting the structure right from day one.

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