Contractors All Risks Cover
CAR insurance is a comprehensive policy designed to protect construction projects from a wide range of risks. It covers both material damage to the works and third-party liabilities during the construction phase.
It’s often taken out jointly by contractors and sub-contractors, project owners or developers, and financiers to ensure seamless protection throughout the project lifecycle.
Breakdown of what is covered under Contractors All Risk Cover
Risks Covered
A. Material Damage Section
Covers accidental physical loss or damage to:
- Permanent works: The actual structure under construction (e.g. buildings, roads, bridges)
- Temporary works: Scaffolding, formwork, hoardings
- Construction plant and equipment: Cranes, mixers, generators (can be extended to include owned or hired-in plant)
- Materials on-site or in transit: Including those stored off-site but intended for the project
B. Third-Party Liability Section
Covers legal liability for:
- Bodily injury or death to third parties (e.g. pedestrians, neighbouring property occupants)
- Damage to third-party property caused by construction activities
Common Exclusions
- Defective design, workmanship, or materials (unless resulting damage is covered)
- Wear and tear, corrosion, or gradual deterioration
- War, terrorism, and nuclear risks (can sometimes be added via extensions)
- Contractual penalties or consequential losses (e.g. loss of future profits)
- Vehicles licensed for road use (covered under motor insurance)