Contractors All Risks Insurance | Policysouq

Contractors All Risks Insurance

A Contractors All Risks Insurance (C.A.R) protects contractors from loss or damage to contract works and materials during construction and even claims from third parties for bodily injury or property damage.

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How it works what is covered ?

Cover is provided on an “All Risks” basis. This means that the policy covers all accidental, sudden physical losses to contract works unless specifically excluded in the policy. The cover is split into 2 primary sections:

Material Damage

  • All Risks cover for costs of reinstatement of contract works following a loss or damage
  • Types of losses to contract works that would be covered under this section would include
  • Fire & Explosion
  • Natural Perils (Flood, Storm, Inundation)
  • Accidental Damage To works
  • Lightning
  • Losses from Riots, Strikes or Civil Commotion
  • Collapse of Structures
  • Impact by Vehicles
  • Malicious Damage
  • Burglary


    Contractors can also opt to include cover the following:

  • Plant equipment
  • Cover loss damage
  • Cover for loss or damage to the principals existing and surrounding property (where required)
  • Cover damage temporary facilities
  • Cover for damage to temporary facilities such as site offices

Thrid pary liability

C.A.R also covers losses from third parties claims for bodily injury and property damage. During construction, a contractor may cause accidental damage or bodily injury to third parties and is legally liable to pay damages for such incidents.

A few scenarios of this would be :

  • Fire starting construction site
  • Contractors’ worker drops tool
  • Building glass crack
  • Damage pipes

Cover is provided on a limit per occurrence.

Limits offered start at AED 500,000 per occurrence and can go up to AED 100,000,000 (or higher) per occurrence where contractually required.

Additional Covers bundled into the contractors all risks insurance would include :

  • Costs of debris removal
  • Cost of replacing or reproducing damaged plans and documents
  • Professional fees (architects and surveyor fees)
  • Cover for losses during the maintenance period after project completion
  • Loss or damage to materials and equipment during any inland transit or whilst in an offsite storage location
  • Firefighting and extinguishing expenses
  • Claims preparation charges

What is not covered under a contractors all risk insurance ?

  • War, Political Risks
  • Nuclear Contamination, Nuclear Radiation Risks
  • Damages Due to Wear and Tear
  • Wilful Acts or Wilful Negligence
  • Cessation of Works
  • Injury to Own Workers
  • Claims from Third Parties for Professional Negligence, Errors and Omissions
  • Fines and Penalties from Any Legal Body
  • Gradual Pollution and Contamination
  • Financial Losses Due to Insolvency, Bankruptcy, Default