Contractors All Risks (CAR)

Contractors All Risks insurance policy is specifically designed for builders and a variety of contractors working at a contract site. Contractors All Risks insurance can comprise cover for public liability, own plant, contract works, hired-in plant and employee's tools. The critical part of the contractors all risks insurance is the contract works section that offers cover for the value of the materials and property being used on a project.

Scope

The policy offers coverage under two sections:

• Section I
  Material damage: The policy covers physical loss, damage or destruction of the property due to any cause other than those specifically excluded in the policy.
• Section II
  Third-party liability: The policy covers the legal liability falling on the insured contractor as a result of bodily injury or property damage suffered by a third party.

Key Benefits

• Material Damage: Under this loss, damage, or destruction of property incurred due to any cause other than those excluded in policy are covered. Most of the policies pay for the losses or damage up to a certain amount that does not exceed the sum mentioned against every item and does not exceed the total sum insured.
• Third-Party Liability: Under this, the coverage towards:
  • Legal liability related to accidental damage or loss caused to the property of third-person
  • Legal liability for non-fatal and fatal injuries caused to third-person (other than the own employees or workers of the insured) due to the construction of the property
  • Perils that are covered under contractors all-risk policy are:
    • Fire and allied perils
    • Collapse
    • Earthquake, shock, and fire
    • Faults in construction
    • Storm, flood, cyclone, and tempest.
    • Negligence and human errors
    • Water damage

Add-On Covers

Cover can be extended up to a limit chosen by the insured on the following, on payment of additional premium:

• Express freight, Holiday and Overtime
• Airfreight
• Breakage of glass
• Additional customs duty
• Cost of Clearance & Removal of debris
• Earthquake
• Escalation
• Storage at Fabricator's Premises/ Workshop
• construction equipment like scaffolding, shuttering materials
• Contractor's plant & machinery
• Cross liability
• Third-party liability
• Maintenance visits cover and Extended Maintenance cover to cover accidental loss or damage whilst carrying out any rectification during the maintenance period and/or any amount incurred for rectification of such original defects or faults during construction.
• Owner's surrounding property or damage to surrounding property not forming part of the contract work.
• Terrorism

Exclusions

The main exclusions under Section I for which no claim is payable, are loss or damage due to:

• Faulty design
• Rectification of aesthetic defects of structure not relating to any physical loss or damage to the structure due to an accident, or of material defector of workmanship defect
  The exclusion of defective material/workmanship is limited to the parts of the structure immediately affected. It does not apply to any consequential loss to correctly executed items, arising out of the accident due to defective material or workmanship
• Loss or damage due to gradual deterioration, atmospheric condition, rusting etc
• Loss discovered only at the time of taking inventory
• Loss arising out of the penalty for delay, non-fulfilment of terms of the contract

Claim Process

In the event of loss, following are immediate actions to be taken
To intimate to the insurer the occurrence of loss, submit full statement in writing of the claim, provide the nature and extent of loss and also the estimate of loss. Any delay in intimation might jeopardize the claim as the insurer may express inability in accepting liability of the loss / damage.

• To take all steps to reduce and minimize the extent of loss/damage and liability.
• Proximate cause of the loss and assess the type/extent and whether it is within the scope of the policy
• To extend full co-operation to the insurer and the surveyor appointed for completion of the survey work and proper assessment of the loss
• Produce all such records and proof as may be required by the surveyor or the insurer for arriving at the extent of loss and the liability under policy.
• Provide documents such as, claim form, Claim bill, copy of policy etc
• Keep the damaged property under the safe custody until advised by the surveyor/insurer regarding its disposal
• Identification of the subject matter insured