On construction projects, risk does not begin when the building is finished; it is present from the very first stage.
Considerable physical values are held on site throughout the different stages of the work, from excavation, foundations and reinforced concrete through to roofing, façade, and mechanical and electrical installations. As the project advances, both the total value on site and the risk profile change.
Contractors All Risks (CAR) Insurance allows sudden and unforeseen physical loss or damage to the construction values insured under the policy, occurring within the period of insurance, to be assessed in accordance with the terms of the policy.
Which risks can be considered?
Depending on the scope of the policy and its special conditions, risks such as the following may be considered:
- Fire
- Lightning
- Explosion
- Earthquake
- Flood and inundation
- Storm
- Frost
- Landslip
- Rockfall
- Falling
- Impact
- Breakage
- Theft
- Certain physical damage arising from carelessness or negligence
- Sabotage
The term “All Risks” does not mean that every event is covered unconditionally. The exclusions, limits and special conditions set out in the policy are also taken into account.
What can be insured?
Depending on the nature of the project, the following may be considered under the policy or by way of additional cover:
- Construction works in progress
- Construction materials
- The mechanical and electrical installations forming part of the project
- Temporary works
- Site equipment
- Construction plant and equipment
Additional cover
Depending on how the policy is structured, areas such as the following may also be the subject of additional cover:
- Third party liability
- Debris removal costs
- Express freight costs
- Overtime costs
- Strike, riot and civil commotion
- Maintenance period
The risk changes as the project progresses
A project at foundation stage and a structure nearing completion do not carry the same risk profile.
The following factors are considered together in any assessment:
- Contract value
- Construction period
- Type of structure
- Ground conditions
- Construction methods used
- The contractor and subcontractor structure
- Third party property in the vicinity
- Site security
Under Contractors All Risks Insurance, what matters is not only what is being built, but the conditions under which the project is being carried out.