Contractors All Risks Insurance Coverage

Contractors All Risk Insurance (CAR) is a specialized insurance policy designed to provide comprehensive coverage to contractors and construction project owners. It safeguards against a wide range of risks, including damage to the construction site, materials, and equipment, as well as third-party liabilities.

The specific eligibility and contractors all risk coverage requirements may vary depending on the insurance provider and the nature of the construction project. It’s essential to consult with an insurance agent or broker to determine the right coverage and policy for your specific needs.

What’s covered by contractors all risks insurance policy?

It covers a wide range of risks and potential losses that can occur during the construction process. Here’s an extensive explanation of what is typically covered by contractors all risk insurance policy:

Property Damage

Contractors all Risk policy covers physical damage to the construction project itself, including the building under construction, materials, supplies, and equipment on-site. This coverage includes damage caused by perils such as fire, natural disasters, theft, and vandalism.

Third-Party Liability

CAR insurance typically includes coverage for third-party liability claims. This can protect you from legal and financial responsibilities if your construction activities cause injury or property damage to third parties, such as neighboring properties or individuals passing by the construction site.

Construction Equipment and Tools

Contractors all risks insurance coverage extends to construction equipment, machinery, and tools used on-site. This includes protection against damage, theft, and vandalism.

Materials in Transit

CAR insurance can cover materials and supplies in transit to and from the construction site, safeguarding them against damage or loss during transportation.

Design and Engineering Errors

Contractors all risks insurance policies may include coverage for design and engineering errors or omissions. This can protect against financial losses resulting from design flaws or mistakes in project planning.


Coverage may include damage or loss caused by the collapse of a building or structure during the construction process.

Temporary Structures

CAR insurance cover can cover temporary structures, like scaffolding and formwork, used in the construction project.

Debris Removal

It typically covers the cost of removing debris resulting from a covered loss, like a fire or structural collapse.

Contractual Obligations

The policy may help fulfill contractual obligations, ensuring that the construction project complies with contractual requirements.

Mechanical and Electrical Breakdown

Coverage may extend to damage caused by the breakdown of mechanical and electrical systems, such as HVAC, elevators, or generators.

Testing and Commissioning

Contractors all risks policy covers expenses associated with the testing and commissioning of the project to ensure it meets required standards.

Deductibles, coverage limits, and exclusions also vary, so it’s crucial to carefully review the terms and conditions of the policy and consult with an insurance professional to ensure that your specific project’s needs are adequately addressed.

Extending contractors all risk Insurance.

Contractors All Risk (CAR) insurance policies can often be extended or customized to meet the specific needs of a construction project. The ability to extend the policy depends on the insurance provider and the terms and conditions of the policy, but here are some common scenarios in which CAR insurance can be extended or modified:

  • Project Duration: If the construction project is taking longer than initially planned, you may be able to extend the policy to provide coverage for an extended period. This ensures that you remain protected throughout the project’s completion.
  • Additional Coverages: Depending on the project’s unique risks, you can often add additional coverages to the standard CAR policy. For example, if your project involves unique risks like environmental concerns or historic preservation, you can extend the policy to include coverage for these specific risks.
  • Change in Scope: If the scope of the project changes during construction, you can typically adjust the CAR insurance coverage to align with the new requirements. This might include changes in project size, location, or purpose.
  • Higher Limits: If you anticipate that the project value or the potential risks have increased, you can extend the policy by increasing coverage limits to ensure adequate protection.
  • Excess Liability Coverage: You may choose to add excess liability coverage to the policy, which provides additional protection if the standard liability limits are exceeded.
  • Subcontractor Coverage: If subcontractors are involved in the project, you can extend the policy to include them as additional insured parties, ensuring that their work is also covered.
  • Professional Indemnity Coverage: In cases where design professionals (architects or engineers) are involved, you might extend the policy to include professional indemnity coverage for errors or omissions in their work.
  • Geographic Extensions: If the project extends beyond the original geographic location, you can extend the policy to cover multiple project sites.
  • Inland Transit Coverage: If materials or equipment need to be transported overland to various project sites, you can extend the policy to cover these items during transit.
  • Delay in Startup Coverage: You can add a delay in startup (DSU) endorsement to the policy, which covers the financial losses resulting from construction delays.

To extend or modify a CAR insurance policy, you should work closely with your insurance provider or broker. They can help assess the specific needs of your construction project and tailor the policy to ensure comprehensive coverage. Be sure to review all changes, terms, conditions, and any associated costs to make informed decisions about extending your Contractors all risk (CAR) insurance.