Two Fatal Tunnel Losses in Four Weeks: Testing the Underground Works Clause in Himalayan EAR and CAR Programmes

On 21 July 2026 a suspected methane build-up triggered a blast that collapsed a tunnel at the 500 MW Teesta hydroelectric project at Samardung in Sikkim, being built for NHPC. Early reports put the toll at 10 dead, and Chief Minister Prem Singh Tamang said 17 of the 21 workers who had been inside remained missing.

On 14 August 2026, four weeks later, water and debris burst into a tunnel at THDC's 444 MW Vishnugad-Pipalkoti project in Chamoli, Uttarakhand, killing at least seven. Of the 22 workers in the tunnel, 12 were rescued and three remained missing. HCC was handling construction on a scheme that includes a main tunnel of about 13 km and a tail-race tunnel of about 3 km on the Alaknanda.

Teesta was an atmosphere failure: gas accumulating in a confined heading, ignited. Vishnugad-Pipalkoti was a ground and water failure: a charged feature intersected by the face. For an insurance programme they land on the same page of the policy, because both are underground works losses, and underground works in an Indian erection all risks or contractors all risks placement are governed by a separate set of conditions from the rest of the site.

Most project owners can recite their sum insured, act of God deductible and delay in start-up indemnity period. Very few can state the underground works sub-limit, the probing distance warranted ahead of the face, or the debris removal cap that applies to a blocked drive.

A hydro placement is normally split. Erection all risks carries turbines, generators, gates, transformers and switchyard equipment. Contractors all risks carries the civil works: portals, adits, headrace and tail-race tunnels, surge shafts, the powerhouse cavern and the diversion structures. Both cover physical loss or damage to the contract works from any cause not excluded.

The underground portion is then carved back out. Indian market placements attach a special conditions for underground works endorsement, usually drafted from the reinsurer's tunnelling wording and read against the ITIG Code of Practice for Risk Management of Tunnel Works. Four things change once that endorsement attaches:

1. A separate sub-limit. Loss or damage to the tunnel works, and often to surrounding property arising from tunnelling, is capped per event at a figure well below the contract value.
2. A separate deductible, frequently the largest on the schedule after act of God, and sometimes expressed per event per heading.
3. Conditions precedent on method: probe drilling, pre-grouting, face support, monitoring, and compliance with the approved method statement.
4. Defined exclusions specific to underground work, typically the consequences of deliberate deviation from the approved method, and re-excavation costs beyond a stated allowance.

Take the Vishnugad-Pipalkoti geometry: a main tunnel of about 13 km and a tail-race tunnel of about 3 km. A sum insured on the full contract value says little about recovery on an inrush, because the loss is never the whole tunnel. It is a length of drive, the lining and support in it, the plant caught in it, the water and debris that have to come out, and the ground treatment needed before the face can advance again.

Three caps interact, each set independently at placement:

• The underground works event sub-limit, applying to the tunnel loss itself, sized against a plausible single-heading event rather than the contract value.
• The debris removal sub-limit, usually a percentage of the admitted claim or a stated amount, whichever is lower, and written for surface sites where debris goes to a spoil heap.
• Any inner limit on surrounding property or third-party ground movement, which on a hill scheme takes in slope instability above the portal and damage to access roads and habitation.

On a surface site, the destroyed asset and the cost of clearing it are roughly proportionate. Underground they decouple. A face collapse may destroy a modest length of primary support while requiring months of mucking out through a single-access drive, with every cubic metre hauled the full distance to the portal, and re-excavation of the collapsed section through disturbed ground that now needs forepoling, spiling or a pipe roof it never needed the first time.

A debris removal cap set as a percentage of the material damage claim inverts that. The smaller the physical damage, the smaller the allowance to clear it, which is the wrong direction for a blocked heading kilometres from daylight. Ask for tunnel debris removal as a separate stated amount, sized from the haul distance and the mucking rate the project actually achieves.

Teesta is the harder underwriting question, because a suspected methane build-up in a Himalayan hydro heading sits outside what most placement files assume.

Gassy ground is planned for in coal measures and in some sedimentary sequences. On a hill hydro scheme the tender documents and the geological baseline often treat the drive as non-gassy, and the method statement, ventilation design, equipment specification and monitoring regime all follow from that. Once a heading is classified non-gassy, the crew does not carry continuous detection at the face, the plant is not intrinsically safe, and the ventilation is sized for diesel exhaust and dust rather than for dilution of a flammable accumulation.

That creates three separate insurance problems after an explosion.

1. Disclosure. The proposal, geological baseline report and method statement together form the risk presented. If gas was identified in ground investigation, in an adjacent drive or in the contractor's own risk register and did not reach the underwriter, the insurer has a non-disclosure argument against the whole underground section, not only the gas loss.
2. Condition compliance. Underground works endorsements commonly warrant gas monitoring, ventilation and safe working procedures appropriate to the classification of the heading. Where the classification was wrong, an insurer will say those conditions were never capable of being met.
3. Peril characterisation. Explosion is an insured peril in most tunnelling wordings, but the surveyor still has to decide whether the proximate cause is explosion, collapse following explosion, or defective method. Each routes to a different deductible and sub-limit, and the preliminary report fixing that characterisation is written in the first week.

Water and debris bursting into a heading is the loss the underground works conditions are written to police, and they cluster around one idea: the contractor must know what is in front of the face before the face gets there.

Typical requirements in an Indian placement include probe drilling ahead of the face at a stated minimum lead length, pre-grouting where probe results indicate water or weak ground, a stated water pressure or inflow rate above which advance stops pending treatment, face support and ring closure within a specified distance, and instrumentation read at defined intervals. These are usually drafted as conditions precedent to liability for inrush and collapse losses.

What a claim file needs, and what most sites actually keep

After an inrush, the insurer's first request is the shift record, not the damage estimate. Probe logs with dates, chainages and lead lengths. Grout records with volumes, pressures and takes. Face mapping. Convergence and piezometer readings. The approved method statement and every revision. The daily record of who authorised advance after each probe round.

Projects that keep these as a live QA record recover. Projects that reconstruct them after the event do not, because the reconstruction is visibly a reconstruction and the surveyor treats it accordingly. On a 13 km drive the record has to survive years of production, multiple subcontractors and at least one change of tunnel manager.

The same discipline decides the delay claim. Delay in start-up responds only to delay caused by damage indemnifiable under the material damage section, so a defeated inrush claim takes the loss of profits claim with it, and on a hydro scheme the delay figure is usually the larger of the two. Our note on contractors and erection all risks with ALOP on infrastructure projects sets out how the sections interlock.

Both losses trapped people, and both would have trapped plant. Drill jumbos, loaders, shotcrete rigs, ventilation fans, pumps, transformers and the entire temporary services train sit in the drive when it fails. Recovering that value runs into a different set of conditions.

Contractors plant and machinery cover, standalone or as a section of the CAR programme, normally carries a warranty that plant is maintained and operated in accordance with the manufacturer's recommendations and by competent operators. Underground, three further issues attach:

• Declaration of underground working. Plant in tunnels and shafts is rated and restricted differently from surface plant, and an undeclared fleet invites a non-disclosure argument on the machine that mattered most.
• Lessor interest. Most Himalayan tunnelling fleets are part hired. Name the lessor on the hirer's policy as loss payee and cover continuing hire charges as a separate head, because a machine buried behind a collapse generates hire liability for months after the physical loss.
• Salvage and abandonment. Whether a recoverable but uneconomic machine is a total loss is where these claims stall. Fix it in the hire agreement, including who pays for recovery attempts that fail. The salvage treatment agreed in the lease usually decides the outcome.

Workers died in both headings and others remained missing. That claim runs on separate paper from the material damage claim, and it is the part most project files handle worst.

Three covers respond, and they do not overlap cleanly. Statutory compensation under the Employees' Compensation Act, 1923 covers the employment injury. Employer's liability responds to employee claims beyond the statutory scheme. Group personal accident sits on top as a contractual benefit. Check the workers compensation and liability schedules of insured persons against the contractors on site.

The subcontractor headcount problem

A Himalayan tunnelling face is worked by labour engaged through several layers. The principal contractor's policy names its own employees. The subcontractor's policy may lapse, exclude underground work, or never have existed. Where it fails, the principal is exposed as principal employer, and the claim arrives with no register behind it.

Four records decide whether a casualty claim is provable at all:

1. The tag board record for the shift, showing who entered the heading and who came out.
2. Daily manpower returns by subcontractor, with names, ages and identity details.
3. Wage registers, which fix the compensation quantum under the 1923 Act.
4. Nominee and dependant records, without which payment stalls even where liability is admitted.

Where workers are missing rather than confirmed dead, intimate immediately and expect payment to wait on proof of death. Presumption of death otherwise takes seven years unless the district administration issues certificates against an official missing-persons list. Check whether the group personal accident wording carries a disappearance clause, because many restrict it to the wrecking or sinking of a conveyance and would not answer for a collapsed heading. The same problem after the Nepal flood is covered in our note on EAR, DSU and employer's liability for Himalayan hydro contractors.

Underground works pricing in the Indian market is set by treaty and facultative capacity reading international tunnelling loss experience, so a Himalayan owner cannot argue the terms down on local grounds. What an owner can do is make the terms match the tunnel being built.

1. Read the underground works endorsement as a separate policy. Extract the sub-limit, the deductible basis, every condition precedent and every underground-specific exclusion onto a one-page control sheet, and give it to the tunnel manager rather than filing it with the broker.
2. Size the debris removal allowance from the haul. Ask for a stated amount for tunnel works derived from access geometry and realistic mucking rates, not a percentage of the material damage claim.
3. Declare gas honestly, and re-declare it if the ground changes. Get the heading classification, the ventilation basis and the detection regime into the risk presentation. Endorse any mid-drive reclassification in writing before changing the working method.
4. Make the probing and grouting record a QA deliverable. Probe logs, grout takes, face maps and instrumentation readings, controlled and retrievable for the life of the drive.
5. Match the indemnity period to a tunnel rebuild. Reinstating a collapsed heading through disturbed ground, with a single access and a weather-constrained season, does not fit a twelve month indemnity period.
6. Reconcile the manpower and plant schedules monthly. Every subcontractor's compensation cover, every hired machine's declaration, every named lessor interest, checked against who and what is actually underground.

Four weeks in Sikkim and Chamoli show where risk transfer stops. Engineering insurance will fund reinstatement of a tunnel within its sub-limits if the conditions were met. It does not fund the consequences of a heading classified, ventilated, probed or supported on the wrong assumption, and it never restores a crew. The parallel discipline on urban drives is in our note on urban tunnelling and metro construction underwriting.