Why you need Contractors All Risk Insurance

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June 7th, 2022 |

Contractors All Risk (CAR) insurance is an insurance policy specially designed for builders and a number of other construction trades. It is a type of construction insurance designed to cover a wide variety of the common risks you might encounter during construction. As its name would imply, a Contractors All Risk policy is designed to mitigate many of the things that can go wrong while you’re constructing. From damaged equipment to blueprint errors, a good CAR policy will help keep you covered against most eventualities.

What type of risks are covered under CAR?

Public Liability: Cover if a third party (other businesses on site, general public) incurs damages or bodily injury for example; while carrying tools into a building site, you bump into someone else’s fence and damage it. They sue you for the cost of repairs.           

Employers’ Liability: Legally required if you’re going to be hiring anybody (full-time, part-time, sub-contractors etc.). Cover if they’re injured/become unwell while working for you for example; an employee cuts himself while using a saw and believes inadequate safety equipment is at fault. They’re out of work for 2 weeks due to the injury, and sue you to cover their lost wages.

Contract Works: Cover for both the main subject matter of the contract (house, offices, factory etc.) and any unfixed materials on-site (windows, pipes etc. awaiting installation). But for works on only a portion of a building, only that area is covered. For example, if a loft renovation is being carried out on a residential property, contract works would cover the loft in case of a covered event like a fire but it wouldn’t cover the rest of the house. That would be the responsibility of the homeowner’s building insurance.       

Plant and Machinery: Covers both own and hired-in plant. Insurance for theft, loss, damage (fire, flood etc.) of plant while on-site. May also cover Temporary Buildings (huts, portable toilets) for example; a couple of cement mixers you own are waterlogged during a minor flood and broken. Your Plant insurance covers the cost of equivalent replacements.        

Business Interruption: Covers financial loss for the cost of delays if you’re unable to continue working (high winds, flooding) due to circumstances out of your control for example; a heavy storm means you can’t get on-site for a week. Your Business Interruption insurance covers your lost profits from the additional time you need to complete the project

Tools: Insurance for your handheld tools (welding guns, drills) if they’re lost, stolen or damaged accidentally for example; your toolbox is stolen from a secure building site overnight. You’re covered for the cost of replacing the equipment inside.

Who needs Contractors All Risk?

If you’re working on high value, complicated contracts then a Contractors All Risk policy can protect you from most eventualities, so it is absolutely worth considering.

It may be less valuable to businesses typically working on smaller projects, where you might find that your existing insurances keep you sufficiently covered.

For large-scale projects, you may be required to agree to take out a policy jointly with the business employing you before beginning work (other involved parties, such as investors or financing companies may also be named). This allows both your business and theirs to make a claim if they incur damages.

We as Statewide Insurance Company Limited (SWICO), offer flexible Contractors All Risk Insurance (CAR) that is designed to custom fit your needs on a case by case basis. With over 40 years of Insurance experience, your project is safe in our hands as we aim to be “Your Preferred Insurance Company.”