Contract all risk insurance, also known as CAR insurance, is a type of insurance that provides coverage for all risks that may arise during the construction of a project. It is designed to protect contractors, owners, and other parties involved in the construction process against losses that may result from damages or accidents that occur during the construction phase.
This type of insurance policy is usually taken out by contractors or project owners before the construction phase begins. It covers a wide range of risks that may arise during the construction process, including damage to property, machinery breakdown, and other types of losses that may occur due to natural disasters, fire, or theft.
CAR insurance policies are usually customized to meet the specific needs of the project and its stakeholders. For example, the policy may cover additional risks such as environmental liabilities or third-party claims if the project is located in a densely populated area.
Contract all risk insurance usually covers the following risks:
1. Physical damage and loss of property: This includes damage or loss of materials and equipment, as well as property damage to the site.
2. Third-party liability: This covers any claims that may arise from a third party for injuries, losses, or damages that they may suffer as a result of the construction work.
3. Machinery breakdown: This covers loss or damage to machinery and equipment used in the construction process.
4. Force majeure: This covers damage or losses that are caused by events beyond human control, such as natural disasters or acts of terrorism.
5. Delays: This covers costs that may be incurred as a result of project delays, including additional labor or materials costs.
In summary, contract all risk insurance is an essential type of insurance for any construction project. It provides protection against a wide range of risks that may arise during the construction phase, thereby reducing the financial burden that may be incurred due to any unforeseen events. For contractors and project owners, having a comprehensive CAR insurance policy is an essential step towards ensuring the success of any construction project.