A Contractor's All Risk (CAR) insurance policy is a specialized type of insurance designed to cover construction projects. It provides comprehensive protection against a wide range of risks that can occur during construction, and it’s typically taken out by contractors, developers, or property owners.
What Does It Cover?
CAR insurance usually has two main sections:
- Material Damage Cover
This covers physical loss or damage to the works, materials, and sometimes even construction equipment and machinery. For example:- Fire, flood, storm, or accidental damage during construction
- Theft or vandalism of materials on site
Collapse of the building under construction
- Third-Party Liability Cover
This covers legal liability for injury or property damage to third parties (people not involved in the project). For example:- A pedestrian injured by falling debris
- Damage to neighboring property during excavation
Who Is Covered?
- The main contractor
- Subcontractors
- The project owner or developer
- Sometimes engineers or architects, depending on the policy
Common Use Cases
- Residential or commercial building projects
- Infrastructure works (roads, bridges, tunnels, etc.)
- Renovations or remodeling
Key Points to Remember
- It usually runs from the start of the project until completion or handover.
- Can be extended to cover maintenance periods after completion.
- Exclusions may apply (e.g., wear and tear, faulty design not covered unless specifically added).