Contractors All Risk insurance for civil and construction contractors

What Contractors All Risk insurance is

A Contractors All Risk policy insures the contract works against accidental physical loss or damage during the period of insurance. The words “all risks” describe the basis of cover: instead of listing the events that are covered, the policy covers accidental loss or damage unless an exclusion applies. That makes the exclusions, conditions and sub-limits as important as the headline description.

You will hear the same product described as contract works insurance, construction all risks or CAR insurance. The names are used interchangeably in the market; what matters is the policy wording, the sections that are included and the sum insured.

Most CAR policies are built from a material damage section for the works and, depending on the insurer and the arrangement, a third-party liability section and optional extensions. Where the liability section is not included, a separate public liability policy is usually discussed alongside it.

Who may need Contractors All Risk insurance

CAR cover is most often discussed when a contractor is about to start, or has just been awarded, a defined project. It is relevant to:

• Civil contractors building roads, stormwater and sewer networks, pipelines, culverts, bulk earthworks and bridges.
• Building contractors whose contracts require cover for the structure, temporary works and materials on site.
• Subcontractors whose main contract requires them to carry their own insurance or to be included in the main contractor’s policy.
• Contractors tendering for public or private work where the tender documents set minimum insurance requirements that must be evidenced after award.

If you are not sure who should carry the insurance on a particular job, send us the relevant contract clauses and we will help you understand what is being asked before you commit to a policy.

What may be insured, subject to terms

The exact scope depends on the insurer, the wording and what you declare. The items below are common topics for discussion; none of them is automatically included.

The permanent works

The works under construction, such as pipe installations, road layers, structures or earthworks, as defined in the policy schedule and tied to the contract value you declare.

Temporary works

Items such as shoring, formwork, cofferdams and temporary access roads. These are often subject to conditions or sub-limits, so ask how they are treated.

Materials and goods on site

Materials delivered for incorporation into the works, subject to conditions on storage and security. Materials in transit to site are usually dealt with under goods in transit cover.

Existing property of the employer

Some contracts require cover for existing structures in the vicinity of the works. This is usually an extension that must be requested and priced.

Debris removal

Clearing debris after an insured loss may be offered as an extension or sub-limit.

Defects liability period

Some policies can be extended into the maintenance or defects liability period, normally limited to damage arising from work done during the contract. Confirm how long the extension runs.

Plant and equipment

A contractor’s own plant is normally insured separately under plant all risk insurance. In some arrangements it can be added.

Important limitations and questions to discuss

Contract works policies exclude or restrict some of the situations contractors worry about most. Ask the following before relying on any quotation:

Faulty design, materials and workmanship

Policies commonly exclude the cost of putting right the defective work itself, while accidental damage that results from a defect may be treated differently. The precise wording decides the outcome.

Existing underground services and structures

Damage to services you were meant to locate, or to existing structures near excavations, may be excluded, limited or subject to a higher excess. See our drainage and sewer industry page for typical exposures.

Water, storm and flood

Works in or near watercourses, low-lying ground or open excavations are exposed to water damage. Ask how the policy treats storm, flood and inundation and whether special conditions apply.

Theft and security conditions

Cover for stolen materials is often conditional on fencing, lock-up storage or guarding. A breach of a security condition can affect a claim.

Sum insured and underinsurance

If the declared contract value is lower than the true value, a claim may be reduced proportionally. Include variations and employer-supplied materials.

Period of insurance

The policy period must cover the contract programme. If the contract period is extended, the policy may need to be extended too, and the insurer may charge for it.

Who is insured

Contracts often require the employer, main contractor or subcontractors to be noted as insureds, sometimes with a waiver of recovery rights against them.

Excess and special risks

Ask which excesses apply to each type of loss. Riot, strike and similar events are normally outside standard policies; see Sasria special-risk cover.

How it fits with other construction covers

Contract works insurance deals with the works themselves. Other exposures on the same project are usually handled by different covers, and the contract may require several of them.

Information we usually need for a quotation

A quotation request moves faster when you can share the following. See also our guide to documents for a construction insurance quote.

You do not need everything on day one. A short description of the work is enough to start, and the quote form only asks for the details relevant to your enquiry.