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Contractor's All Risk Policy

What is Contractor’s All Risk Policy?

During the execution of construction projects, whether for buildings or civil engineering works, unforeseen accidents can occur, leading to significant financial losses. These losses may arise from damage to contract works, construction materials, plant and machinery, or even third-party claims.

The Contractors All Risks (CAR) Insurance is specifically designed to safeguard the interests of contractors and principals by providing comprehensive protection against such unexpected losses, ensuring financial security and uninterrupted project progress.

Who needs Contractor’s All Risk Policy?

Although a Contractors All Risks (CAR) policy can be taken by either the principal or the contractor, it is typically the contractor’s obligation to secure the insurance. Under the terms of the agreement between the contractor and the principal, the contractor is usually required to obtain a CAR insurance policy in their joint names before the project commences, ensuring both parties are adequately protected against potential risks.

Why you should Buy Contractor’s All Risk Policy?

The need of Contractor's All Risk Policy is more than ever before due to the following reasons

1

One point contact for all requirements.

2

Better understanding of risk, effective underwriting of portfolio and better risk management.

3

Dedicated Risk engineers to cater construction sector clients.

4

Financial strength and supreme claims paying capacity

Why you should Buy Contractor’s All Risk Policy?

Contractors All Risks (CAR) insurance provides comprehensive coverage to the client, protecting against contingencies throughout the project lifecycle. The policy begins as soon as materials are unloaded at the project site and continues to provide coverage during:

  • Storage: Protection for materials and equipment stored on-site.
  • Construction/Erection: Coverage during the physical construction or erection phase.
  • Testing: Includes protection during the test run phase.
  • Maintenance (if covered): Extends coverage to the maintenance period if included in the policy.

This end-to-end protection ensures peace of mind for clients, safeguarding their interests throughout the project duration.This end-to-end protection ensures peace of mind for clients, safeguarding their interests throughout the project duration.

What is covered Contractor’s All Risk Policy?

Below are the detailed inclusions and exclusions of Contractor’s All Risk Policy

  • Location Risks: Fire, Lighting, Theft, Burglary & Housebreaking.
  • Testing and Commissioning Risks*: Failure of Safety Devices, Leakage of Electricity, Insulation failure, Short circuit, explosion.
  • Testing and Commissioning Risks*: Failure of Safety Devices, Leakage of Electricity, Insulation failure, Short circuit, explosion.
  • Handling Risks: Impact from falling objects, Collision, Failure of Cranes or Tackles etc.
  • Risk of Human Element: Carelessness, Negligence, Faults in Erection/Construction, Strike & Riot, Malicious damage, Terrorism.
  • Testing Perils: Maximum value at risk. A specific request to be made to UW.
  • War & Allied Perils.
  • Wilful act or wilful negligence of Insured/ his representatives.
  • Excess in respect of each claim as stated in the policy.
  • Normal wear and tear, gradual deterioration, lack of use, obsolescence, rust, etc.
  • Any damages/ penalties on account of the Insured of the terms of delivery/ completion under his contract of construction.
  • Nuclear & Allied Perils.
  • Cessation of work.
  • Losses discovered only at the time of taking an inventory.
  • Loss/ damage due to faulty design, defective material or casting other than faults in erection.
  • Consequential loss/ liability of any kind.

*The insurance cover is subject a few exclusion listed in the policy which are applied internationally and are common to the insurance industry.

Frequently Asked Questions

It’s an All Risk Policy.The Policy indemnifies the Insured in the event of unforeseen and sudden physical loss or physical damage to the Property Insured arising:

  • during the period of Insurance
  • whilst at the Project Site (or in storage)

Contractor’s All Risk Policy is basically for insuring projects which have more than 50% civil works

PTo insure all types of civil works ranging from small buildings to massive dams/structures are susceptible 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.

  • Princiap or Owner
  • Contractor
  • Sub-contractor

After a fire, flood, burglary, earthquake or other such event, there is obvious destruction, loss or damage to buildings, plant and stock. This physical loss or damage is known as Material Damage.

Risk is evaluated on the basis of nature of work and exposure of natural hazard to the risk location.

  • Accidental loss or damage to property belonging to third parties (including consequential financial loss
  • Accidental bodily injury / illness to third parties

Theft is covered under the policy.

  • You can buy, Contractors Plant & Machinery for the plants and equipment involved in the construction.
  • Marine Insurance for the transit of construction material
  • Workmen's Compensation for your workers

To insure all types of civil works ranging from small buildings to massive dams/ structures are susceptible 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.

  • Principal Or Owner
  • Contractor
  • Sub-contractor

What information should one share to issue the Contractors all risk policy?
  • Detailed RFQ
  • Principal, Contractor, Sub-contractor details
  • Estimated Cost of project- contract cost, Other than Project BOQ material, Taxes etc
  • Projects Start date, End date, and Bar chart
  • Details towards Testing for EAR projects
  • Equipment details like Imported equipment, second-hand details for EAR projects
  • Sum Insured breakup towards different scope of works
  • Risk location details, in case of multiple locations- names of all locations. (Lat-long coordinates & Google maps
  • required for road projects, transmission lines)
  • Complete/Detailed scope of works or contract copy
  • Wet works details and sum insured if involved

The policy has a maximum period of 84 months inclusive of Extended Maintenance Period.

This insurance may be terminated at the request of the Insured at any time, in which case, the Insurers will refund appropriate premium amount subject to the following conditions.
  • Claims experience under the policy as on date of cancellation should be less than 60% of reworked premium.
  • The unexpired period is not less than 3 months or 25% of the policy period, whichever is less.
  • Testing period should not have commenced.

Policy can be taken for a minimum period of 3 months.

At Finoxo Solutions, we specialize in providing tailored insurance solutions that cater to both commercial and individual needs. With a commitment to excellence and innovation, we ensure our clients receive comprehensive coverage and unmatched service for their peace of mind.

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B-407, Decora 9 Square, Nr. Nana Mava Chowk,RAJKOT

+91 90333 30444

info@finoxo.in

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