Understanding The Basics Of Contractors All Risk Insurance

UNDERSTANDING THE BASICS OF CONTRACTORS ALL RISK
INSURANCE
Contractors All Risks (CAR) insurance is an insurance policy that provides coverage for both
material damage to property and third-party injury or damage claims for a project or contract
that is underway. Construction projects carry inherent risks, and it's crucial for contractors to
protect themselves against these risks. One way to do this is by having CAR insurance.
The construction industry is highly diverse and each construction project is unique in terms
of its size, scope, and complexity. As a result, each risk is underwritten on its own merits and
requirements as per the information provided. This means that insurance providers must
assess the project's specific risks and tailor the insurance policy to meet those needs. CAR
insurance policies are designed to be flexible and adaptable to the unique needs of each
construction project.

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TYPES OF CAR INSURANCE POLICIES
There are two main types of CAR insurance policies: an annual blanket basis and
project-specific basis.
An annual blanket policy provides coverage for multiple contracts within certain limitations
and based on estimated annual turnovers. This type of policy is best suited for contractors
who undertake a high volume of smaller projects. It provides contractors with a simple and
cost-effective way of ensuring that all their projects are covered under one policy.
In contrast, a project-specific policy is tailored to a specific contract and is only in effect for a
set period at a specified address. This type of policy is more appropriate for larger projects
that involve a higher level of risk. The policy provides coverage for the specific project and
ensures that all risks associated with the project are covered.

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SECTIONS OF COVER
CAR insurance policies offer several sections of cover. These include:
Contract Works - Material Damage: This section provides coverage for the physical loss or
damage to the contract works, which can include the building, machinery, equipment, and
other materials on-site. Coverage may include accidental damage, theft, and vandalism. The
policy may also cover the cost of debris removal and professional fees, such as architects and
surveyors.
Contract Works - Public Liability: This section provides coverage for third-party injury or
property damage that occurs during the construction project. It can include coverage for
legal defense costs, settlements or judgments, and medical expenses. The policy may also
cover additional costs associated with the defense, such as expert witness fees.

Principal's Advanced Loss of Profits: This section provides coverage for loss of profit that may
result from a delay in the completion of the project due to a covered loss under the Material
Damage section. This can include costs associated with increased project expenses or lost
revenue due to a delay in completion.

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EXCLUSIONS AND LIMITATIONS
It's important to note that CAR insurance policies do not cover certain risks, such as damage
due to wear and tear or faulty workmanship. Additionally, policy exclusions may apply to
certain types of projects, such as high-risk construction projects or those involving hazardous
materials.
It's essential to work with a trusted insurance provider to ensure that your specific project
risks are appropriately assessed and covered. Your insurance provider can help you
understand the policy exclusions and limitations and provide you with guidance on how to
mitigate risks that are not covered.

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CONCLUSION
In summary, contractors need to have adequate protection against risks associated with
construction projects, and CAR insurance provides that protection. Whether on an annual
blanket or project-specific basis, contractors can rest assured that they are covered against
the most common risks of property damage and third-party liability. The flexibility of CAR
insurance policies means that they can be tailored to meet the unique needs of each project,
providing contractors with peace of mind and the ability to focus on delivering their project
on time and within budget.