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Contractor All Risk Insurance: complete protection for construction projects

See how Contractor All Risk (CAR) Insurance covers construction projects against damage, accidents, natural calamities, and third-party liability.

Premium starts at ₹15,000 per project Excluding taxes. Terms and conditions apply.

Construction site protected by Contractor All Risk insurance

Benefits

  • Comprehensive cover for construction, erection, and installation risks
  • Protection against fire, theft, natural calamities, and accidents
  • Covers third-party liability for injury or property damage
  • Covers contractor plant, machinery, and surrounding property

What is Contractor All Risk Insurance?

Contractor All Risk (CAR) Insurance is a comprehensive policy designed to protect construction and infrastructure projects against a wide range of risks during the construction period. It covers damage to the project works, contractor's plant and machinery, and third-party liability.

The policy provides cover against fire, theft, burglary, natural calamities (flood, earthquake, storm), accidents, and human error. It is essential for builders, contractors, developers, and project owners to safeguard their investment and legal liability.

Examples

Building construction: Covers damage to the structure, materials, and equipment during the construction of residential, commercial, or industrial buildings.

Infrastructure projects: Protects roads, bridges, dams, pipelines, and power plants against damage during construction and installation.

Erection and installation: Covers the erection and testing of machinery, plant, and equipment at project sites.

How Contractor All Risk Insurance works

  1. Project assessmentEvaluate the project type, location, duration, and risk exposure.
  2. Choose a policySelect a CAR policy with appropriate sum insured and cover sections.
  3. Pay the premiumPay the premium based on project value, duration, and risk profile.
  4. Risk transferThe insurer covers the project works, plant, machinery, and liability.
  5. Report a lossNotify the insurer immediately when a loss or damage occurs.
  6. Survey and assessmentThe insurer appoints a surveyor to assess the loss.
  7. SettlementThe claim is settled based on the survey report and policy terms.

Who should buy Contractor All Risk Insurance?

Contractors, builders, and project owners. Any party involved in construction, erection, or installation work should have CAR insurance. It is often mandatory in construction contracts and required by project financiers and government authorities.

Frequently Asked Questions

Contractor All Risk Insurance is a comprehensive policy that protects construction projects against damage, accidents, natural calamities, and third-party liability. It is important because construction projects involve high-value assets, complex operations, and significant risk exposure, and CAR insurance safeguards the contractor's investment and legal liability.
While not legally mandatory in all cases, CAR insurance is often required by project owners, financiers, and government contracts. Many construction contracts and loan agreements make it a precondition to safeguard the project and third parties.
Covered parties typically include the principal (project owner), the main contractor, sub-contractors, and other parties involved in the project. The policy covers the project works, contractor's plant and machinery, and third-party liability.
CAR insurance covers fire, lightning, explosion, theft, burglary, natural calamities (flood, earthquake, storm, landslide), accidental damage, human error, machinery breakdown, and third-party liability for bodily injury or property damage.
Yes, CAR insurance includes third-party liability cover for bodily injury, death, or property damage caused to third parties during construction. This protects the contractor from legal claims and compensation payments.
Yes, CAR insurance can cover contractor's plant and machinery (CPM) either as part of the main policy or as a separate section. It covers equipment like excavators, cranes, mixers, and tools against damage or theft.
Contractor All Risk (CAR) covers civil construction projects like buildings, roads, and bridges. Erection All Risk (EAR) covers the erection, installation, and testing of machinery and plant. Both are similar in structure but apply to different project types.
Yes, the premium paid for CAR insurance is generally tax-deductible as a business expense under Section 37(1) of the Income Tax Act, provided the policy is taken for business purposes.