Construction/Erection/Contractor’s All Risks (CAR)

The basic concept is to offer comprehensive and adequate protection against loss or damage in respect of the contract works, construction plant, equipment and machinery, as well as against third-party claims in respect of property damage or bodily injury arising in connection with the execution of a construction project.

A CAR policy may be concluded by the principal or by the contractors engaged in a project, including all subcontractors. CAR insurance provides an “all risks” cover – every hazard is covered which is not specifically excluded. This means that almost any sudden and unforeseen loss or damage occurring during the period of insurance to the property insured on the construction site will be indemnified.

The most important causes of losses indemnifiable under CAR insurance are:

• Fire, lightning, explosion
• Flood, inundation
• Windstorm of any kind
• Earthquake
• Theft, burglary
• Badwork manship, lack of skill, negligence, malicious acts or human error.

• loss or damage due to electrical or mechanical breakdown, failure, breakage or derangement, freezing of coolant or other fluid, defective lubrication or lack of oil or coolant, but if as a consequence of such breakdown or derangement an accident occurs causing external damage, such consequential damage shall be indemnifiable;
• loss of or damage to replaceable parts and attachments such as bits, drills, knives or other cutting edges, saw blades, dies, moulds, patterns, pulverizing and crushing surfaces, screens and sieves, ropes, belts, chains, elevator and conveyor bands, batteries, tyres, connecting wires and cables, flexible pipes, jointing and packing material regularly replaced;
• loss of or damage to vehicles designed and licensed for general road use unless these vehicles are exclusively used on construction sites;
• loss of or damage to waterborne vessels or craft;
• loss or damage occurring whilst any insured item is undergoing a test of any kind or is being used in any manner or for any purpose other than that for which it was designed;
• loss or damage due to any faults or defects existing at the time of commencement of this Policy within the knowledge of the Insured or his representatives, whether such faults or defect were known to the Insurers or not;