Construction All Risk (CAR) Insurance policy

Q. What is Construction All Risk Insurance?

Construction All Risk Insurance / Contractors’ All Risk covers civil construction projects such as residential and office buildings, hospitals, schools, theatres, roads, railways, bridges, tunnels, airports, dams, weirs, irrigation and drainage facilities, canals and ports. In addition the following will also be covered:-

i. Preparatory work at the construction site such as site facilities, excavation and leveling work and temporary structures (e.g. access roads, diversion canals and protective embankments)
ii. Any materials to be used in the construction work stored at the site

The Contractors All Risk Insurance provides cover against a wide range of perils. Some of the covered perils are:

1. Fire, lightning, explosion, aircraft damage
2. Riot, strike, malicious act
3. Flood, inundation, storm, cyclone and allied perils
4. Landslide, subsidence and rockslide
5. Burglary and theft
6. Faults in erection
7. Human errors, negligence
8. Short circuiting, arcing, excess voltage
9. Electrical and mechanical breakdown
10. Collapse, damage due to foreign objects, impact damages

 

Q. What does this policy cover?

The policy offers coverage under two sections:-

Section I Material damage:- For physical loss, damage or destruction of the property due to any cause other than those specifically excluded in the policy.

Section II Third-party liability:- For the legal liability falling on the insured contractor as a result of bodily injury or property damage suffered by a third party.

Q. What is the sum insured?

This depends on the type of project, Sum Insured and duration of the project, and the voluntary excess opted for by the Insured. The premium can be paid in installments, when the policy period is more than 12 months

 

Q. What is the duration of this policy?

The cover comes into effect from the time of commencement of work or after the unloading of the insured property at the site, whichever is earlier, and expires on the date specified in the policy or handing of the project to Principal and engaging in commercial use whichever is earlier.

Q. What does this policy not cover?

The Policy will not cover any claim related to:-

1. Any damage or injury to contractor’s own workers.
2. Inventory losses
3. Consequential loss
4. Wear and tear
5. Faulty design
6. Willful act or willful negligence of the insured
7. Cessation of work
8. Defective material or bad workmanship
9. War and related perils
10. Nuclear reaction, nuclear radiation or radioactive contamination
Q. What are the Add-On covers under Contractor’s All Risk Insurance?

1. Express freight, Holiday and Overtime
2. Air freight
3. Breakage of glass
4. Additional customs duty
5. Removal of debris
6. Earthquake
7. Escalation
8. Storage at Fabricator’s Premises/ Workshop
9. Construction, plant & machinery
10. Cross liability (In the event of claim by one insured for which another insured covered by the same policy may be held liable)
11. Third party liability
12. Maintenance visits cover and Extended Maintenance
13. Owner’s surrounding property
14. Terrorism
15. Damage to property to insured site.

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