Contractor's All Risk Insurance

 

What is Contractor All Risk Insurance?

 

As a result of the Contractor’s All Risk Insurance, you are protected against loss, damage, and/or claims by third parties resulting from the execution of a civil engineering project. The coverage includes losses or damages arising from contract works, construction plant and equipment, and/or construction machinery. Consultant engineers, architects, and financiers find this policy extremely useful since it can reduce their overall construction expenses while also providing them with effective financial protection for all parties concerned.

 

A Contractor’s All Risks (CAR) Insurance policy covers the construction phase of a project or one-time policy for the duration of the project. Civil engineering construction projects, such as buildings, bridges, factories, power stations, etc., are covered under this policy, which serves to protect contractors and principals.

 

In accordance with the C.A.R. policy, there is an “All Risk” coverage. A wide range of risks are covered as long as they are not specifically excluded. A construction site insurance policy provides coverage for most sudden and unforeseen losses and damages that occur during the period of insurance

What is covered?
 

Theft & Burglary

Flood & Inundation

Accidental damage

Collapse, impact etc

Act of terrorism etc

Fire, Lightning, Explosion

Windstorm of any kind

Malicious acts or human error

Bad workmanship, Lack of skill, negligence

Earthquake, Landslide, Subsidence

What is not covered?

Coverages which are excluded in the policy as mentioned below:

 

  • Weakening, rusting, etc.
  • Cases and other packing materials
  • The amount of loss reported as “Excess”
  • Drawings, cheques, currency, and files.
  • Damage or loss caused by faulty design.
  • The loss discovered during the inventory process.

  • Waterborne vessels or equipment mounted on them or vehicles registered for general road use.
  • A penalty arising from failing to comply with his construction contract’s delivery and completion terms.
  • Unless there is physical damage to the construction site, the cost of correcting any errors during construction.
  • Material and/or workmanship that needs to be repaired or replaced. However, this applies only to the particular item affected, and does not exclude damage to items executed correctly as a result of accidents involving defective materials or workmanship.

 

What are add-on covers?

You can add additional coverages as Add-on Covers. These include:

 

  • Escalation
  • Third Party Liability
  • Clearance and removal of debris
  • Surrounding property of the insured
Types of coverages

Maintenance visits cover: Under this policy, the insured contractor (s) will be held responsible for any loss or damage caused during the course of any maintenance activities undertaken in order to comply with the requirements of the contract.

 

Extended maintenance cover:

 

During the maintenance period this insurance shall cover loss or damage to the contract works:

  • The insured contractor (s) are responsible for the damage incurred during the course of the maintenance activities required to comply with the maintenance terms of the contract.
  • The loss or damage occurred during the erection period if it occurred during the maintenance period.

 

Third party liability: An indemnity policy reflects the insured’s liability to pay compensation for accidental loss or damage to other people’s property, or for any fatal or non-fatal injury to a person, subject to the limit of indemnity set out in the policy. Additionally, indemnity applies to legal costs recovered by a claimant, as well as costs incurred by the insured with the insurer’s written consent.

General exclusions

 

The indemnity does not apply to losses, damages or liabilities arising from:

 

  • Wilful act or wilful negligence of the insured or of his responsible representative.
  • Cessation of work, whether total or partial.
  • Nuclear risks as well as risks associated with war and related events

 

Conditions

 

  • Taking reasonable precautions, following company recommendations, and complying with statutory requirements are required of the insured.
  • An additional premium must be paid in the event of a material change in the risk.
  • A claim must be filed within 14 days of the loss occurring. As required by the company, documentary evidence should be submitted. If the loss is the result of theft, notify the police.
  • Subrogation means that the insurer may recover against other parties responsible for the loss as a result of the insured’s rights and remedies.
  • If the loss is covered by other insurance policies, the rateable contribution will be determined.
  • Disagreements concerning the quantum of the claim to be arbitrated.
  • All benefits under the policy are forfeited if the claim is fraudulent.
  • The insured can cancel the policy within a short period of time; the company can refund premiums on a pro-rata basis

FAQs

This policy is required to insure all types of civil works ranging from small buildings to massive dams/structures are open to damage by fire, water, storm, impact, landslide and the like and exposure to such damage commences right from the first delivery of materials at the contract site and site and continues during the entire period of contract.

  • Contractor
  • Sub-contractor
  • Principal or Owner

Risk is evaluated on the basis of the nature of work and exposure of natural hazards to the particular risk location

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