Introduction

IKHLAS ERECTION ALL RISKS TAKAFUL is a plan that provides protection against risk involved in the erection of plants, machinery and steel structures of any kind. It also provides coverage against third party claims in respect of damaged property or bodily injury arising from the erection works.

What does IKHLAS Erection All Risks cover?

Section I - Material Damage
IKHLAS ERECTION ALL RISKS TAKAFUL provides an all risks cover. Under this section, the Company agrees that any unforeseen and sudden physical loss or damage from any cause occurring during the period of takaful, other than those specifically excluded will be indemnified.

The Company will also reimburse the cost of clearance of debris following upon any event giving rise to a claim provided a separate sum has been declared and entered in the Certificate Schedule.

Section II - Third Party Liability
The Company will indemnify the participant up to the amounts specified should the participant become legally liable to pay as damages consequent upon;

a)	Accidental bodily injury to or illness of third parties (whether fatal or not)
b)	Accidental loss of or damage to property belonging to third parties occurring in direct connection with the erection, construction or testing of the items covered under Section 1 and happening on or in the immediate vicinity of the site during the Period of Cover.

The Company will in addition indemnify the Participant against;

a)	All costs and expenses of litigation recovered by any claimant from the Participant, and
b)	All costs and expenses incurred with the written consent of the Company, provided that it does not exceed the limits of indemnity stated in the Certificate Schedule.

Period of Cover
The liability of the Company starts directly upon commencement of work or after unloading of items covered at site and continue until taking over or after the first test operation or test loading is completed whichever is earlier; but not beyond four weeks from the date of commencement of the test (unless otherwise agreed in writing).

If, however, a part of a plant or one or several machine(s) is/are tested and/or put into operation or taken over, the cover for that particular part of the plant or machine(s) and any liability resulting therefrom ceases whereas the cover continues for the remaining parts.

In the case of second-hand items, the takaful however ceases immediately on the commencement of the test.

Sum Covered
The sum covered is the value of the machinery or plant to be erected in accordance with the supply contract, including freight, customs duties and dues, and erection cost.
Usually, separate sums covered are fixed for:-

*	Erection machinery and equipment at new replacement value;
*	Property located on the site, belonging to or held in care, custody or control of the Participant or the Principal
*	Additional covers, e.g. for air freight expenses.
*	Cost of clearance of debris Third Party Liability is also covered subject to a separate limit of indemnity for any one accident or series of accidents arising out of one event.

Exclusions
The cover provided by IKHLAS ERECTION ALL RISKS TAKAFUL is comprehensive subject to certain exclusions as specified in the Certificate. In addition, the Company will not indemnify loss, damage or liability directly or indirectly caused by or arising out of or aggravated by;

Special exclusions to Section I- Material Damage
The Company shall not be liable for:

a)	The deductible stated in the schedule to be borne by the Participant in any one occurrence;
b)	Consequential loss of any kind or description whatsoever including penalties, losses due to delay, lack of performance, loss of contract;
c)	Loss or damage due to faulty design, defective material or casting, bad workmanship other than faults in erection;
d)	Wear and tear, corrosion, oxidation, incrustation;
e)	Loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, evidence of debts, notes, securities, cheques, packing materials such as cases, boxes, crates;
f)	Loss discovered only at the time of taking an inventory.

Special exclusions to Section II- Third Party Liability
The Company will also not indemnify the Participant in respect of:

a)	The deductible stated in the schedule to be borne by the Participant in any one occurrence;
b)	Expenditure incurred in doing or redoing or making good or repairing or replacing anything covered or coverable under Section I of this certificate;
c)	Liability consequent upon
	i.	Bodily injury to or illness of employees or workmen of the contractor(s) or the principal(s) or any other firm connected with the project which or part of which is covered under Section I, or members of their families;
	ii.	Loss or damage to property belonging to or held in care, custody or control of the contractor(s), the principal(s) or any other firm connected with the project which part of which is covered under Section I, or an employee or workman of one of the aforesaid;
	iii.	Any accident caused by vehicles licensed for general road use or by waterborne vessels or aircraft; iv. any agreement by the participant to pay any sum by way of indemnity or otherwise unless such liability would have attached also in the absence of such agreement.

Standard Extensions of Basic Cover

Clearance of Debris
The Company will reimburse the Participant for the cost of clearance of debris following upon any event giving rise to a claim. The proposer should be encouraged to declare an adequate amount for clearance of debris which is to be entered in the Certificate Schedule under Section 1.

Existing Structures and/or Surrounding Property
Loss of or damage to property located on or adjacent to the site and belonging to or held in care, custody or control of the principal(s) or the contractor(s) may be covered if occurring in direct connection with the erection, construction or testing of the items covered under Section 1 and happening during the period of cover, and provided that a separate sum covered (i.e. limit of indemnity) has been entered in the Certificate Schedule under Section 1.

This cover does not apply to construction/erection machinery and construction/erection equipment.

The relevant sum covered (i.e. limit of indemnity) should be fixed to allow for a substantial accident involving such property, i.e. considering the value of all items surrounding the erection site or held in care, custody or control.

Third Party Liability
Third party liability can only be covered in conjunction with material damage under Section I.
The limit of indemnity for third party liability should not exceed:

• The total sum covered under Section I of the Certificate Schedule;
• The total limit of indemnity stated in the Reinsurance Treaty (RTL);
• Whichever sum is lower.

Extra charges for overtime, night work, work on public holidays, express freight are covered only if previously and specially agreed upon in writing.

Construction / Erection Equipment
The construction/erection equipment such as scaffolding, fencing, fire fighting equipment, site camp, site offices etc may be covered under the Certificate.

The items to be covered must be entered in a "list of construction/erection equipment". This list is to be appended to the Certificate.

Construction / Erection Machinery
When on site, construction/erection machinery may be covered under the Certificate. In such cases a complete list of these items showing the new replacement values is to be appended to the Certificate.

Specisl Extensions of Basic Cover

Strike, Riot and Civil Commotion
On request, the risks of strike, riot and civil commotion (SRCC), not assuming the extent of a popular rising, may be included. The indemnity limit which can be granted for this extension however should not exceed the sum covered.

Cross Liability
If several parties are covered who want to be in a position as if a separate certificate had been issued to each party, Cross Liability extension has to be applied.
The purpose of this endorsement is to define exactly the scope of cover granted to an individual contractor under Section II of the Certificate:

*	Loss of or damage to items covered under Section I of the Policy is not indemnifiable under Section II. One thereby avoids that material damage caused by one contractor to another contractor’s or to the principal’s property is handled under the TPL section.
*	Persons occupied on the construction site are not covered under the Policy against accidents at work if they are or could have been covered under Workmen’s Compensation and/or Employer’s Liability insurance. Any liability arising out of fatal or non-fatal injury or illness of these employees or workmen is excluded.

Maintenance
Section I of the Certificate can be extended to cover loss of or damage to the erection works occurring during the maintenance period.

Two types of cover are available:

a)	Maintenance visits - cover for loss or damage caused by maintenance operations
b)	Extended maintenance - cover as per a) and also for loss or damage occurring during the maintenance period which was caused within the construction or erection period. This cover, however, may be problematic and should therefore be avoided whenever possible.

The period of cover for loss or damage during the maintenance period should not exceed 12 months.

Extra Charges for Overtime, Night Work, Work on Public Holidays, Express Freight
Extra charges for overtime, night work, work on public holidays and express freight, incurred in direct connection with repair work may be extended under this Certificate.
The reimbursement of these extra charges is limited to indemnifiable claims, i.e. the repair costs must exceed the deductible.

Extra Charges for Airfreight
Extra charges for airfreight incurred in direct connection with repair work may also be extended.
The reimbursement of these extra charges is limited to indemnifiable claims, i.e. the repair costs must exceed the deductible.