Contractor All Risk Policy

  •  This policy is specially designed to give financial protection to the Civil Engineering Contractors in the event of an accident to the civil engineering works under construction.
  • Coverage under CAR insurance:

CAR insurance is All Risk insurance in simple language the policy covers loss or damage to civil work during course of construction by every cause which are not excluded under the policy.

Policy covers damage due to

  1. Fire & allied perils
  2. Natural calamities like Storm, Flood, Earthquake, Rock sliding, land sliding
  3. Riot & strike
  4. Theft & burglary
  5. Resultant damage due to faulty workmanship, faulty material
  • The policy can be taken by the principal, contractor or sub contractor, jointly or separately.
  • The policy comprises of 2 Sections.
  1. Section I-Material Damage-covering physical loss, damage or destruction of the property insured by any cause, other than those specifically excluded in the policy.
  2.   Section II-Third Party Liability-covering the legal liability falling on the insured contractor as a result of              bodily injury or property damage belonging to a third party.
  • Sum Insured:

Section I – Material Damage

  1. Total Contract Price including the estimated cost of labour charges and cost of materials
  2. Materials or items supplied by the Principal
  3. Any additional items not included in (a) and (b) above

Section II – Third Party Liability (Optional)

The sum insured under section II should represent the per accident limit (the maximum legal liability that may fall on the insured as a result of an accident in the insured’s site). The limit per policy period should be fixed taking into account the maximum number of such accidents which can reasonably be expected to occur.

  • Important Exclusions under Section I
  1. Excess – First amt. of each & every loss to be borne by insured.
  2. Faulty design
  3. The exclusion of defective material / workmanship is limited to the parts of the structure immediately affected and does not apply to any consequential loss to correctly executed items, arising out of the accident due to defective material or workmanship.
  4. Loss discovered only at the time of taking inventory.
  5. Loss arising out of penalty for delay, non-fulfillment of terms of contract.
  6. Consequential loss
  • Period of Insurance

Period of insurance should be equivalent to the period of contract, commencing from the date of unloading of the first batch of material at the site of construction and expiring on the date of handing over of the contract work to the principal.

In case of delay in completion of work, policy can be extended by paying additional premium depends upon extension period.

  • Excess: 5% of claim amount subject to minimum ——–depends upon nature of work for normal and AOG/Major Perils/ Collapse claims.