Contractors All Risks (CAR) insurance is a type of insurance policy designed to provide coverage for construction projects and contractors. It offers comprehensive protection against a wide range of risks and perils that can occur during the construction process. Here’s what is typically covered under a Contractors All Risks policy: https://www.investopedia.com/terms/c/contractors-all-risks-car-insurance.asp

1. Property Damage: CAR insurance covers damage to the physical property being constructed, including buildings, structures, and materials, caused by various perils such as fire, flood, storm, theft, vandalism, and accidental damage.
2. Third-Party Liability: It provides coverage for legal liabilities arising from bodily injury, death, or property damage to third parties (such as neighboring properties or individuals) caused by the construction activities.
3. Construction Plant and Equipment: CAR insurance typically covers loss or damage to construction machinery, equipment, and tools used on-site.
4. Materials in Transit: It offers coverage for materials and equipment while they are being transported to and from the construction site.
5. Temporary Works: CAR insurance can cover temporary structures, scaffolding, formwork, and other temporary works erected during the construction process.
6. Delay in Start-Up (DSU) or Advance Loss of Profits (ALOP): Some CAR policies include coverage for financial losses resulting from delays in the completion of the project due to insured events. This coverage may include reimbursement for additional expenses incurred to expedite the project’s completion.
7. Professional Fees: CAR insurance may cover the reasonable costs of architects, engineers, surveyors, and other professionals needed to rebuild or repair damaged property.
8. Optional Extensions: Depending on the insurer and policy, additional coverage options may be available, such as terrorism insurance, legal expenses coverage, and coverage for damage to surrounding properties.

It’s important to note that while CAR insurance provides broad coverage for construction projects, there are typically exclusions and limitations in the policy. Common exclusions may include pre-existing defects, wear and tear, faulty workmanship, and contractual liabilities beyond the scope of the policy.

Contractors All Risks insurance is essential for construction contractors and project owners to protect their investment and mitigate financial risks associated with construction projects. It provides peace of mind knowing that financial losses resulting from unforeseen events during the construction process are covered by insurance.