Construction Insurance
Cover From Ground-Breaking To Handover
Construction insurance protects a project while it is being built — the works themselves, the plant and machinery on site, and your liability to others. MILES has insured major residential, commercial and hospitality projects for leading developers in Gurugram and understands what lenders, project agreements and RERA expect from a developer’s insurance programme.
Covers We Place For Projects
Contractors' All Risk (CAR)
Physical loss or damage to civil works under construction from accidental causes, fire, flood, storm and more.
Erection All Risk (EAR)
Cover for plant and machinery while it is being erected, installed and tested.
Contractors' Plant & Machinery
Cranes, excavators, batching plants and other construction equipment, on or off site.
Third-Party Liability
Injury to people or damage to neighbouring property caused by construction activity.
Delay In Start-Up (ALOP)
Advance loss of profits when an insured loss delays the project beyond its scheduled completion.
Maintenance & Handover
Extended maintenance-period cover and a smooth move to the operational property policy at handover.
What is construction insurance?
Construction insurance protects a project from the day work starts until it is handed over. The core policy, Contractors’ All Risk (CAR), covers physical loss of or damage to the works — foundations, structure, materials on site and temporary works — from accidental causes such as fire, flood, storm, collapse and theft. A third-party liability section covers injury to people and damage to neighbouring property caused by the construction.
For projects that involve installing plant and machinery, Erection All Risk (EAR) covers the equipment while it is erected, tested and commissioned.
Why developers and contractors need it
- Lenders require it. Construction finance agreements almost always require an all-risk policy with the lender named as loss payee.
- Contracts require it. EPC and construction contracts specify who insures the works and the minimum limits.
- RERA obligations. Section 16 of the Real Estate (Regulation and Development) Act, 2016 places an obligation on promoters to insure the title and construction of a real-estate project.
- The risk is concentrated. A single flood, fire or collapse on a live site can cost more than a year’s margin on the project.
Covers we place for projects
| Cover | What it protects |
|---|---|
| Contractors’ All Risk (CAR) | Civil works, materials and temporary works during construction |
| Erection All Risk (EAR) | Plant and machinery during erection, testing and commissioning |
| Contractors’ Plant & Machinery (CPM) | Cranes, excavators, batching plants and other construction equipment |
| Advance Loss of Profits / Delay in Start-Up | Lost income or extra interest when an insured loss delays completion |
| Third-party liability | Injury to the public and damage to neighbouring property |
| Employees’ compensation | Statutory compensation to workers injured on site |
Getting the programme right
Sum insured and period
The CAR sum insured should equal the full contract value of the completed works, including materials supplied by the principal. The policy period must cover the whole construction schedule plus any testing and maintenance period — and be extended promptly if the project runs late.
One policy or many
A developer-arranged project policy, covering the developer and all contractors under one programme, usually avoids gaps and disputes between multiple contractor policies. MILES can advise which structure suits your contract.
From construction to operation
At handover, cover must move from the CAR policy to an operational property policy and, for residential projects, to the society’s own programme. MILES manages that handover so there is no gap. See property insurance.
Our experience
MILES has insured major residential, commercial and hospitality projects for leading developers in Gurugram and Delhi NCR, including 24 of 30 major project launches over a two-year period. We know what lenders, auditors and project managers look for, and we stay involved through every claim.
What we need for a quote
- Project description, location and site layout
- Total contract value and a breakdown of civil, MEP and plant values
- Construction schedule, including testing and maintenance periods
- Soil and flood-risk information, and nearby structures
- Contract or loan clauses that set insurance requirements
Cover, exclusions and premiums depend on the insurer’s policy wording and underwriting. MILES Insurance Brokers Pvt. Ltd. is an IRDAI-licensed direct broker (Reg. No. 954); the insurance is issued by the insurer. Insurance is the subject matter of solicitation.