Contractors All Risks Insurance

Who needs contractors’ all risk insurance?

Anything can happen on a construction site at any given time, and that’s why contractors’ all risk insurance is so important, providing much needed cover to a wide range of professionals involved in construction projects. Here’s some examples of individuals that could benefit from contractors’ all risk insurance:

• Contractors: general contractors, whether it be builders, plumbers, plasterers and subcontractors who wish to protect their construction projects and materials against various risks, such as fire, theft, vandalism, and natural disasters.
• Property Developers: developers who invest in construction projects, such as residential or commercial buildings, to safeguard their investments.
• Construction Project Owners: may want to protect themselves against financial losses resulting from unexpected damage or delays.
• Engineers and Architects: professionals involved in the project design and planning may want to cover their liability in case of design errors or omissions.
• Property Owner: for when they renovate, expand, or perform maintenance work on their properties.
• Banks and Financial Institutions: lenders providing financing for construction projects who wish to protect their investments.
• Government Agencies: public infrastructure projects often require contractors to have insurance to ensure that the projects are adequately protected.

All construction projects are different, and the individuals servicing them are too, and that’s why it’s crucial that a contractors’ all risk insurance policy is as flexible and accommodating as possible, to be able to cater to whoever’s involved and whatever the project is.

What does contractors’ all risk insurance cover?

What is and isn’t covered by a contractors’ all risk policy varies from insurer to insurer, so it’s key that you always get an understanding of what’s covered before proceeding with a policy to cover your project. However, we can say that, typically, contractors’ all risk policies encompass the following types of insurance:

The Contract works

This is to provide cover for all aspects of the property that’s under construction, including the on-site materials. For example, if there’s damage to the structures in progress or theft of materials, the policy should cover the expenses for repairs and replacement materials.

Own Plant and / or hired-in plant

Regardless of whether your company owns professional equipment and machinery outright or is temporarily leasing it through a hiring arrangement, it's imperative that your insurance covers the repair or replacement of equipment should it be damaged while in your possession.

Tools

Some contractors do opt to use their own tools and have their own insurance in place to cover what’s theirs, but even so, your site insurance should encompass coverage for damage or theft of personal tools and other personal belongings on-site.

Public Liability insurance

Public liability cover ensures you are covered from legal liability and the expenses of legal costs and compensation should there be a claim filed against you, perhaps following an injury to a third party or damage to their property while on your project site. Third parties include sub-contractors, customers, suppliers, or members of the public.

Employers’ Liability insurance

In case of unfortunate accidents on your site resulting in employee illness, injury, or even fatality, this insurance covers their compensation following liability claims.

There’s a lot of aspects involved in the coverage of a contractors’ all risk policy, and speaking to an insurance broker can help you get a clearer understanding of exactly what your project needs, and what an insurance company could help you cover.

How much does contractors’ all risk insurance cost?

The cost of a contractors’ all risk insurance premium will depend on a wide range of factors, including:

• Project size
• Location
• Duration of the project
• Insurance provider
• Type of construction

Each of these aspects of a construction project can influence the cost of a policy premium, as well as the terms and conditions of an insurance provider.

The best way to get a better idea of how much your policy will cost is to speak to an insurance broker, such as Howden. We can help you compare various policy options, whilst prioritising your budget, but also not compromising on what you’d like your CAR insurance to cover you for.

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What is Contractors all risk insurance?

Is contract works insurance the same as contractors' all risk insurance?

In an industry riddled with jargon, contract works insurance and contractors’ all risk insurance is sometimes mentioned interchangeably, but this is wrong. Both refer to the same all risk insurance policy, offering the same level of comprehensive cover for construction projects.

Does contractors’ all risks insurance cover defective workmanship?

Whether defective workmanship will be covered or not under a CAR policy will depend on the insurance provider and their terms and conditions.

While some providers will include poor or defective workmanship under their policy coverage, falling under contract works, others will specify what workmanship wouldn’t be covered under their contractors' all risk insurance policy.

We recommend that you always check policy wording before taking out a policy to ensure you’re not left disappointed when claiming on defective workmanship that isn’t technically covered.