Testing and commissioning
The point when a plant, factory or line runs for the first time with its fluid, heat and load. Erection all risks covers it, but within a time limit, often four weeks.
A gas turbine assembled to the millimeter has proved nothing yet. Cold commissioning checks rotation, control loops and pressure tightness with water, without fuel or process. Hot testing brings in gas, steam, power or product: materials expand for the first time, the control system responds to real values, and a wiring error becomes a short circuit on a 300 MVA generator. This is the heaviest period of erection. Insured value is at its peak, everything is installed, and so is the stress. The large EAR losses fall here: overspeed, water hammer, blade failure, lube oil fire. Erection all risks covers testing, but within limits. The usual wording restricts cover to a hot testing period, often four weeks per item from the first test under load, and never beyond taking-over; an extension is negotiated, with a testing deductible higher than the erection deductible. Second-hand equipment generally loses cover when testing starts. Excluded are loss of performance without damage, since a guaranteed output not reached belongs to the EPC contract and its liquidated damages, and design defects beyond what the chosen LEG or DE clause gives back. The underwriter reads the test procedure before quoting: who runs it, the machine manufacturer or the EPC contractor, the trip thresholds, the number of planned starts. A schedule that slips pushes the last tests outside the covered window, and the delay that follows lands in ALOP.
Textbook case, in numbers. A combined cycle plant has four weeks of hot testing covered, extended to eight by endorsement. On day 33, a compressor blade fails: 14 million euros of damage, testing deductible of 1.5 million, so 12.5 million paid. Without the endorsement, the loss falls after the window and nothing is paid. Start-up slips by 120 days; ALOP applies a 45-day deductible and pays 75 x 80,000 euros of daily margin = 6 million. Total: 18.5 million euros.
hot testing, cold commissioning, testing period, commissioning risk, start-up testing
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