Contractors All Risk Insurance Explained
A builders expert guide about contractors all risk (CAR) insurance
Understand what contractors all risk insurance covers and as a construction company or builder why you need the cover to protect your interests
Contract works insurance and contractors all risk insurance explained
As a Willis Towers Watson Network Broker, we are experts in builders insurance and work with the best contractors all risk insurance companies to arrange policy coverage on your behalf. The below guide will help construction companies and builders understand the difference between contractors all risk insurance and contract works insurance.
What is contractors all risk insurance?
Contractors all risk insurance is a flexible policy designed to meet the needs of construction companies on building sites. Coverage can include contract works, public liability, product liability, employers' liability, own plant, hired-in plant, and JCT insurance.
It’s important to work with a specialist construction insurance broker when reviewing your needs. Typically, the contracts (i.e. JCT) will identify who is responsible to purchase the necessary insurance policies.
Contract works insurance is one cover available under a CAR policy, however when clients, architects, or project managers refer to contractors 'all risk' in isolation, they will be seeking contracts works.
Why contractors all risk insurance is important?
With many different parties involved in construction projects, it's important that you work with an expert to arrange the necessary insurance covers. We've produced the below guide for contractors and builders to explain how contractors all risk insurance can protect your business.
Looking for contact works or contractors all risk? We can separate or combine your builder's liability and property coverage
Quotes for contractors all risk insurance from the wholesale market starts at £468 annually or £39 a monthWhat does contractors all risk insurance cover?
Own plant & equipment
Own plant and equipment insurance helps protects against damage to own plant and equipment whilst in your custody or control or hired out under a defined agreement. For example: scaffolding, temporary buildings, site office contents and site welfare facilities.
Hired-in plant
Equipment insurance will help protect your legal liability under the terms of your hiring agreement to pay compensation for damage to hired-in plant, whilst in your custody or control.
Employee tools
Insurance will help protect against damage to personal tools and effects belonging to an employee, or principle. Cover can vary from policy to policy, so consider whether you have the protection you need.
What additional builders all risk insurance covers are available?
Non-negligence (JCT insurance)
Non-negligence insurance, otherwise known as JCT 6.5.1, helps protects against claims should there be damage to a neighbouring property due to the works carried out arising from collapse, subsidence, heave, vibration, weakening or removal of support, or lowering of groundwater, which is not the result of negligence.
Business interruption
Business interruption insurance protects against the loss of income from being unable to trade as a result of an insured event (i.e. property damage). The contractor's all risk cover will help protect against the consequential loss of the interruption to trade by indemnifying the policyholder for the loss of income as a result of the insured peril.
Do builders need contractors all risk insurance?
Anyone working on a building site should consider arranging contractors all risk insurance. Which covers you decide to purchase will depend on a number of factors including your responsibilities, contractual requirements, size and risk appetite.
Your contract with the client will typically set out the responsibilities of each party, including who is contractually obliged to insure the various elements of the build. Talk to a specialist construction insurance broker about your individual requirements.
Contractors all risk insurance can also be packaged as tradesman insurance for smaller businesses, tradespersons, or construction companies with up to 10 employees, and less than 35% turnover paid to subcontractors.
What does contractors all risk insurance not cover?
Whilst a CAR 'all risk' policy can provide for a number of covers designed specifically for the construction industry, this does not mean your business shouldn't consider other insurance policies. To discuss your business needs, speak to one of our expert construction insurance brokers.
Consider builders all risk insurance to protect your business from 3rd-party compensation claims and property losses
Tradespersons, building contractors and construction companies may all require the coverage provide under a CAR policyHow your contractors all risk insurance cost (£) is calculated?
Contract value
How much contract works insurance you will require will be a significant price determining factor. If a fire were to destroy the build you were responsible, the size of the maximum possible loss will impact your premium cost calculation.
Type of project
Basement works, timber construction, demolition works, quarrying, tunnelling, flood exposed areas, road construction, bridgework, external work on high-rise buildings, piling, ground stabilisation, underpinning, are all considered high risk and therefore increase your premium cost.
Security
Additional security features that will improve your risk profile and reduce your premium cost. These can include cameras, alarms, boundary fence, and 24 hour security.