Construction and engineering projects in the UAE involve complex installation work — cranes, HVAC systems, industrial plant, power equipment, solar arrays. During the erection, testing, and commissioning phase, these assets carry significant risk of accidental damage, third-party injury, and equipment failure. Erection All Risk (EAR) insurance is the specialist policy designed to cover exactly this window. It is a project-specific policy that sits alongside Contractor's All Risk (CAR) cover, and in many UAE infrastructure contracts it is a mandatory requirement set by the project owner or main contractor.
What Does EAR Insurance Cover?
EAR insurance covers physical loss or damage to plant, machinery, and equipment during installation, testing, and commissioning on a UAE project site. The core coverage includes accidental damage, fire, explosion, collapse, and storm. Critically, it also covers the cost of dismantling and re-erecting a damaged machine — not just the cost of the machine itself. This distinction matters greatly on high-value industrial or infrastructure projects where reinstallation can cost more than the equipment.
Most EAR policies also include Third-Party Liability (TPL) coverage, protecting the contractor against claims from members of the public or neighbouring properties injured or damaged as a result of erection activities. Maintenance periods of six to twelve months post-commissioning are often included as an extension, covering defects that emerge during normal operation.
Who Needs EAR Insurance in UAE?
EAR insurance is relevant to a wide range of businesses operating in the UAE's active construction sector. Mechanical and electrical (M&E) contractors, HVAC installation firms, solar and renewable energy project developers, industrial plant operators, offshore and onshore oil and gas installation teams, and property developers procuring specialist fit-out all benefit from EAR cover. In many government and semi-government contracts — ADNOC, DEWA, Emaar, and others — EAR insurance is a contractual obligation before work commences.
Small contractors sometimes assume EAR cover is built into their standard Contractor's All Risk policy. This is rarely the case. CAR policies focus on civil works; the erection of mechanical plant and electrical systems requires separate EAR cover with appropriate sub-limits for testing and commissioning. Failing to hold the right policy can delay a project and expose the contractor to unlimited personal liability.
How EAR Premiums Are Calculated in UAE
Premiums for EAR insurance in UAE are calculated based on the contract value of the erection works, the duration of the project and any maintenance period, the type and complexity of equipment being installed, and the claims history of the contractor. Large infrastructure projects or those involving high-voltage electrical systems attract higher premiums than standard commercial fit-out work. The location of the project and proximity to third parties also affects pricing.
Working with a specialist insurance broker is strongly recommended for EAR cover. Insurers approach this class of business differently, and premium differences of 30–50% are not unusual across the UAE market for the same project risk. An experienced broker will also review the adequacy of the contract sum insured, which is a common source of underinsurance on UAE projects.
Common EAR Exclusions to Watch For
EAR policies contain exclusions that contractors must understand before signing a contract. Wear and tear, gradual deterioration, and faulty design are typically excluded — the policy covers fortuitous (accidental) events, not inherent defects. Consequential loss, such as revenue lost because the project was delayed, is excluded unless a Delay in Start-Up (DSU) extension is separately purchased. War, nuclear events, and wilful misconduct are also excluded as standard.
One exclusion that catches UAE contractors off-guard is the 'testing under pressure' clause — some standard policies exclude damage occurring during hydraulic or pressure testing unless a specific extension is endorsed. Any EAR policy procured for UAE projects should be reviewed by a qualified broker to identify gaps before work begins.