Contractor’s All Risks
Contractor's All Risk (CAR) Insurance is also known as Construction All Risks Insurance. It offers comprehensive protection against loss or damage in respect of contract works, construction plant and equipment and/or construction machinery, as well as for Third Party claims in respect of property damage or bodily injury arising in connection with the execution of a construction project.
Contractor's All Risks Insurance can be taken by the principal, the main contractor and the sub-contractors.
The policy comprises of two sections:
- Section 1: Material Damage - covering physical loss, damage or destruction of the property insured by any cause, other than those specifically excluded in the policy.
- Section 2: Third Party Liability - covering the legal liability imposed on the insured contractor as a result of bodily injury or damage to property belonging to a third party.
Nature of Projects covered
CAR Policy is the insurance to be sought out for construction projects of any nature. These will range from
A. Buildings and simple works such as:
- Administrative and commercial buildings
- Industrial buildings
- Sports and recreation facilities and other similar works
B. Civil engineering works such as:
Scope of Cover
CAR Insurance is in the nature of an "All Risks" cover which provides a comprehensive coverage subject to specific exclusions.
Common perils covered are:
- Fire , lightning & Explosion
- Storm , Tempest, Flood & Inundation
- Collapse, earthquake
- Accidental Damages not other wise excluded
The cover is subject to some exclusions and essentially comprise
- War and kindred perils
- Nuclear risks
- Wilful negligence
- Cessation of work
- Faulty workmanship
- Faulty design
- Consequential losses
Extensions to Basic Cover
In CAR Insurance additional covers can be availed as extensions to the basic cover, to suit the requirements of the contract. Some of the standard extensions are as follows:
- Clearance of debris
- Cover for existing structures and/or surrounding property
- Construction plant/equipment and machinery or contractors plant/equipment and machinery
- Expediting expenses
- Cross liability
- Maintenance risk
Two types of covers are available:
- Maintenance visits
- Extended Maintenance
- Strike, riot and civil commotion
- Inland transit
- Off-site storage
Points to Note
It is a requirement of CAR Insurance that the sums insured (Material Damage) shall not be less than the full value of the contract work at the completion of the construction, inclusive of items and / or materials supplied by the principal.
When determining the sums insured, it is advisable to make allowance for probable increases in cost of material and wages during the period of insurance.
Quotation will be offered on submission of Company's printed proposal form.