By VIRA Advisory Team · July 2026 · 6 min read
We get this question on almost every EPC project we advise on: "Don't we already have insurance for this?" The confusion is understandable — Contractor All Risk (CAR) and Erection All Risk (EAR) sound similar, get quoted by the same insurers, and often get bundled together in conversation. But they cover genuinely different phases of a project, and getting the timing wrong between them is one of the most common coverage gaps we find.
Contractor All Risk covers the civil construction phase — the physical works being built, temporary structures like scaffolding and shuttering, and materials on site. Think foundations, structural concrete, brickwork, civil infrastructure. If a wall collapses during construction, a monsoon flood damages a partially built basement, or stored construction materials are stolen, that's a CAR claim.
Erection All Risk covers the mechanical and electrical erection phase — installing, aligning, and commissioning plant, machinery, and equipment. This includes the testing and trial-run period, which is often when equipment-specific risk is highest. If a crane damages a transformer during positioning, or a wiring fault causes damage during commissioning, that's an EAR claim.
A power plant, industrial facility, or solar installation typically has both a civil construction phase (foundations, structures, buildings) and an equipment erection phase (turbines, transformers, panels, electrical systems). Insuring only one leaves the other phase completely exposed. We've seen projects where a contractor assumed their CAR policy covered equipment installation — it didn't, and a commissioning-phase incident had no cover at all.
The bigger issue isn't choosing one over the other — it's what happens at the handoff between phases. If your CAR policy ends the day civil work finishes, and your EAR policy only starts once erection formally begins, there can be a gap where neither policy responds. On a well-structured project, VIRA aligns the CAR policy's end date with the EAR policy's start date explicitly, so there's no daylight between them.
This is the other common gap. Some EAR policies only cover physical installation and stop short of the testing/commissioning phase — exactly when equipment is switched on for the first time and genuinely at risk. Before assuming you're covered through commissioning, confirm explicitly with your policy wording, not just your broker's verbal assurance.
Consider a solar EPC project: CAR covers the ground-mounting structure construction and any civil foundation work. Once panels, inverters, and electrical connections are being installed and commissioned, EAR takes over. If storm damage hits during civil construction, it's a CAR claim. If a wiring fault damages an inverter during commissioning three months later, it's an EAR claim. Same project, two distinct phases, two distinct — but properly sequenced — policies.
CAR and EAR aren't competing options — they're sequential covers for different phases of the same project. The question isn't "which one do I need," it's "are both properly sequenced with no gap between them, and does the EAR policy actually extend through commissioning." That's the review we run on every EPC project before construction even starts.
Not sure which cover your project needs — or both?
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Contractor All Risk Insurance · Erection All Risk Insurance · EPC Insurance in Gujarat
