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Everything you need to know
What is Contractors All Risk Insurance
CAR Insurance
Contractors All Risk insurance covers the works under construction, materials on site, and your liability to third parties, from the start of work until handover. It protects against fire, flood, earthquake, theft, collapse and accidental damage.
Whether you’re building a ₹10 crore residential complex or a ₹500 crore metro station, CAR insurance ensures that fires, floods, and “oops” moments don’t bankrupt your construction dreams. It’s like having a time machine that financially fixes construction disasters!
Why Is This Policy Vital for Construction Projects
Because Construction Sites Are Disaster Magnets!
Indian construction projects face ₹12,000 crore annual losses from accidents, weather, and design failures. Projects worth crores can collapse overnight—literally! Under many contracts, CAR insurance is mandatory. It’s the difference between “temporary setback” and “permanent project abandonment.” It’s survival insurance for building India’s infrastructure!
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Understand your insurance before buying
Who Needs Contractors All Risk Insurance?
Principal Contractors
Main contractors need comprehensive project coverage protecting structures, materials, and third-party liability throughout construction.
Real Estate Developers
Property developers building residential and commercial complexes require all-risk coverage from groundbreaking to possession.
Infrastructure Companies
Highway, bridge, and metro builders need specialized CAR coverage for large-scale civil engineering projects.
Sub-Contractors
Sub-contractors may be covered under the principal contractor's CAR policy. Check your contract and the policy to see whether you need separate cover.
Project Financiers & Banks
Projects with bank finance — Lenders usually require CAR cover with the bank named as loss payee.
Government Contractors
Public sector project contractors require CAR insurance for tenders and contract compliance.
Types / Add-ons Commonly Offered
Material Damage Section
Works, materials, temporary structures coverage.
Third-Party Liability
Property damage and bodily injury coverage.
Maintenance Period Cover
Extended coverage post-completion (typically 12 months).
Removal of Debris
Cleanup and disposal costs coverage.
Professional Fees
Architect and engineer fee coverage.
Plant & Equipment
On-site construction machinery coverage.
What Contractors All Risk Insurance Covers
Fire & Explosion
Damage to construction works and materials from fire or explosion.
Flood & Storm
Damage caused by flood, storm, cyclone, and heavy rainfall during construction.
Earthquake & Landslide
Damage from earthquake, landslide, and rock slide at the project site.
Collapse & Subsidence
Structural collapse or ground subsidence affecting the works under construction.
Theft & Burglary
Loss of materials, equipment, or fixtures due to theft or burglary from the site.
Riot & Strike
Damage caused by riots, strikes, and civil commotion.
Third-Party Liability
Legal liability for injury or property damage caused to third parties during construction.
Material Damage
Physical loss or damage to construction materials, works, and temporary structures.
Testing & Commissioning
Coverage for damage during testing and commissioning of installed equipment.
Maintenance Period
Extended coverage for defects and damage during the post-completion maintenance period.
Inclusions & Exclusions
✓Inclusions
- Works Under Construction — All permanent and temporary works including materials on-site and in transit.
- Construction Plant & Equipment — On-site machinery and equipment up to the sum insured declared for construction plant in the policy schedule.
- Third-Party Liability — Legal liability for property damage and bodily injury to third parties (excluding workers).
- Architects & Engineers Fees — Professional fees for redesign and supervision up to the limit stated in the policy schedule.
- Debris Removal — Clearing and disposal costs for damaged materials up to the limit stated in the policy schedule.
✗Exclusions
- Design Defects — Faulty design, defective materials, and poor workmanship costs (only resultant damage covered).
- War and nuclear risks — Excluded. Terrorism — Excluded unless specifically added to the policy.
- Workers' Compensation — Employee injuries require separate workmen's compensation insurance.
- Contractual Penalties — Liquidated damages and penalty clauses for project delays excluded.
- Consequential Losses — Loss of profit, interest charges, and indirect damages beyond policy scope.
FAQs
Design defects themselves aren't covered, but resulting physical damage is!
No! Maintenance period (typically 12 months post-completion) needs specific inclusion.
No! Workers need separate workmen's compensation.
Policies are usually arranged per project. Contractors with several projects should speak to us about the options available from insurers.
Before construction starts! Coverage begins from first activity on site.
Damage to existing underground services may be covered under third-party liability, subject to the conditions in the policy wording.