As a building contractor or developer, you would need to look after your capital investments against loss or damage of the materials purchased for the project. You would also need to protect your liability against third-party claims arising from construction activities. Contractor’s All Risk insurance can help you to effectively overcome these situations and put you firmly in control of your business operation.
Key Features of Contractor’s All Risk Insurance
- It offers comprehensive insurance cover for civil engineering projects where the value of civil works is more than 50% of the total contract value.
- The cover operates during storage, erection/construction till completion and the handing over of the works to the principal.
What does Contractor’s All Risk Insurance cover?
Contractor’s All Risk insurance covers sudden and unforeseen physical damage to civil projects under construction insured by any cause or peril not specifically excluded under the policy. It comprises two sections:
Section I- Material Damage:
It provides coverage for the property lost, damaged or destroyed by any cause, other than those specifically excluded in the policy, necessitating replacement or repair. The policy will pay or make good all such loss or damage up to an amount not exceeding the sum specified in respect of each of the items and not exceeding in the whole the total sum insured.
Section II- Third Party Liability:
It provides coverage towards:
a) Legal liability for accidental loss or damage caused to property of other persons
b) Legal liability for fatal or non-fatal injury to any persons other than the insured\’s own employees or workmen or employees of the owner of the works or premises due to construction of any property.
Perils covered under Contractor\’s All Risk insurance include:
- Fire and Allied Perils
- Earthquake, fire and shock
- Flood, storm, tempest and cyclone
- Faults in erection/construction
- Water Damage for Wet Risks
- Human errors, negligence
Add-on covers under Contractor\’s All Risk Insurance
The policy can be extended to cover the following items:
- Construction equipment such as scaffolding and shuttering materials
- Damage to surrounding property of the contract work
- Maintenance visit/extended maintenance cover
- Accidental loss or damage while carrying out any rectification during maintenance period
- Rectification of original defects or faults during construction
Who can take the insurance?
Contractor\’s All Risk insurance can be availed by those who are involved in any way in construction business, such as:
- Purchaser or owner
- Companies financing the project
- Firms commissioned to carry out the work, including subcontractors
You can also cover all participants under single insurance contract for the whole project to avoid gaps in cover.
What is not covered in Contractor’s All Risk Insurance?
- War and nuclear risks
- Partial/total cessation of work
- Willful act or willful negligence of the insured
- Defective material or bad workmanship
- Contractual liabilities
- Normal maintenance or making good
- Normal wear and tear
- Loss or damage due to faulty design
- Disappearance or shortage (inventory losses)
- Consequential losses
Compare and Find the Best Cover Online
There are so many companies offering Contractor’s All Risk Insurance plans and each of them have a different set of features and benefits that it is mind-boggling to select one. Sometimes you end up buying a plan that though costs less, has conflicting clauses and you practically get nothing when making a claim. Conversely, you might buy a fancy plan paying a higher premium only to realize at a later stage that in reality you didn’t use or never needed those frill items.