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Construction All-Risk Insurance

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Construction All-Risk Insurance

If you are into civil construction, you might know that it is linked to various types of risk that can be a heavy load on your budget and can even halt the project. But as a contractor, you also need to ensure completion within the deadline. 
The Construction All Risks (CAR) Insurance Policy is made to provide you coverage against any physical loss/damage to the construction material, equipment, or construction site.  
Read on to get your CAR insurance policy today!

What is Construction All-Risk (CAR) Insurance?

A construction all-risk insurance policy is a type of property insurance that offers all-inclusive protection against any loss/damage related to contract work, construction plant, equipment, and machinery, along with any bodily injury that might occur during the civil-engineering project. 
The construction industry in India has a high accident frequency rate, and these accidents that occur on construction sites are highly under-reported. 
Thus, it becomes more essential to have CAR insurance. Moreover, this CAR policy can be taken by the investor or by the contractor in a project as it provides “all risks” coverage.

Types of Construction All-Risk Insurance

A contractor undertaking a construction project can look to insure a number of things related to the project, like the building, materials in transit, and more. Depending on the nature of the contract, a contractor can take out different types of coverage insurance. Some of the types of coverage available in construction all-risk insurance are:

Builder's Risk Insurance
Builder's Risk Insurance

Builders’ risk insurance is also called Course of Construction (COC) insurance. This type of insurance gives coverage for buildings and other structures while they are under construction. The building can be residential or commercial.

Commercial General Liability Insurance
Commercial General Liability Insurance

General liability insurance is also termed Commercial General Liability Insurance (CGL). It is a class of insurance that offers liability protection to businesses for a range of damages like faulty workmanship, job-related injury, and advertising injury/defamation. 

Errors and Omissions Insurance
Errors and Omissions Insurance

It offers coverage to businesses against claims arising from errors in the work. If a worker makes errors in calculating the structural requirement later, the owner has to make costly repairs down the line

Commercial Auto/Truck Insurance

Commercial vehicle insurance isn’t exclusively available for construction projects. This insurance is intended to provide coverage for large vehicles used by businesses. The coverage helps insurers avoid high vehicle repair costs, medical expenses, or lawsuits due to accidents. 

Inland Marine Insurance
Inland Marine Insurance

This insurance extends well beyond the construction industry and covers many types of properties and equipment. It primarily covers the tools and equipment used by contractors and engineers and is also referred to as tools and equipment insurance.

Contractor License Bonds
Contractor License Bonds

Contractor license bonds are agreements similar to insurance that guarantee that a contractor will comply with the regulations that are applicable to their particular contractor license. It is designed to protect anyone that a contractor is doing business with.

Construction Bonds
Construction Bonds

It is also known as a contract bond and guarantees certain aspects of a contract to be completed. It can be divided into sub-types like bid bonds, performance bonds, payment bonds, and maintenance bonds. 

Workers Compensation Insurance
Workers Compensation Insurance

This type of insurance protects businesses and contractors when their employees are injured while on the job. It protects by covering medical expenses, missed wages, ongoing recovery costs, death benefits, funeral costs, and more.

Why Do You Need Construction All-Risk Insurance?

Construction all-risk insurance is designed to protect civil contractors against the damage of different construction projects. Any accidental damage to these projects or machinery is covered under this policy.
Thus, the reasons why a construction all-risk insurance policy is required are:

  • Most of the plans under this insurance cover civil engineering projects where the civil work is more than 50% of the total value of the contract.

  • The plan covers the project from the time of storage, and construction until the project is handed over to the principal.

  • It is very useful when there is damage to the construction project..

Who Needs Construction All-Risks Insurance?

This aforementioned insurance policy can be availed by those who are involved in the construction business in any way, like-

  • Construction Companies : Companies in the construction business can buy this policy to protect themselves financially from unforeseen circumstances.

  • Finance Companies : The Construction All-Risks insurance policy can also be availed of by the companies that financially support the entire project. As it helps in case some incident occurs during the construction phase.

  • Property Owners : The property owners can also buy insurance for where the construction is happening, as they are the ones who have given the task to the contractor.

  • Contractors and Subcontractors : The contractors and subcontractors that employ workers to perform specific tasks related to the completion of the construction project can buy this insurance policy.

What Will a Construction All-Risk Insurance Policy Cover?

The following coverages are offered under the construction all-risk insurance policies:

  • Material Damage : If any damage occurs to the property during the policy period, it will be covered up to the specified amount under the policy. The policyholder will be reimbursed for the costs incurred for the clearance and removal of debris.

  • Third-party Liability : The CAR insurance policy will compensate you against all legal liability for property loss or for fatal/non-fatal injury to any person other than your own employees.

  • Compensation : The given policy will also provide compensation for all your expenses in litigation recovered by a claimant or anyone who has invoked it with your written consent.

What is Not Covered in the Policy?

The construction all-risk insurance policy doesn’t offer coverage for the following:

  • War and nuclear risk

  • partial/complete cessation of work

  • Willful negligence of the insured

  • Bad workmanship

  • Contractual liabilities

  • Normal maintenance

  • Normal wear and tear

  • damage/accident due to faulty design

How to File a Claim for Construction All-Risks Insurance?

To file a claim under the CAR insurance policy, you have to follow the below-mentioned steps:

  • Contact the insurer and inform them about the incident/accident.

  • Give the details of the incident and the policy number

  • Your claim will be registered, and you will be given a claim registration number.

  • A survey of the damage that occurred is conducted.

  • Once the surveyor gives a thumbs up, the insurer confirms the financial and legal liabilities before settling the claim.

To Sum Up!

Buying office insurance online can have various benefits. It will save you precious time that you can use to expand your business. With online office insurance, claims can be made easily and settled smoothly. 
You will find many office insurance policies, even with traditional companies, but deciding on the right office insurance can be quite confusing. 
This is where Policy Wings comes in!
With Policy Wings, you will be choosing the best office insurance policy to protect your office and, thus, your business.

Frequently Asked Questions

Before quoting the premium for construction all-risk insurance, an insurance provider considers different factors like scope, location, value, and duration of the construction work that one is undertaking.

Policy Wings is a growing insurance distribution network where you can find all insurance under one roof and compare instantly. We make sure that you get the best insurance for your budget.

The indemnity period is the time period within which the insurer can claim office insurance costs.

Contract work under a construction all-risk insurance policy should generally be purchased on an annual basis by the respective parties, for their own needs. However, large construction projects may prefer to take out CAR insurance for all parties on a project-specific basis.

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