AT A GLANCE
How the cover works
Contractors All Risks insurance protects physical works during construction and can extend to materials, temporary works and plant. It may be arranged annually for a contractor’s programme or for a single project.
Responsibility should follow the contract. The insurance must reflect the contract conditions, parties, project value, existing structures, site hazards, duration, maintenance period and any requirement to insure in joint names.
COVER
What may be covered
- Permanent and temporary contract works against insured physical loss or damage.
- Materials for incorporation into the works, including selected off-site storage or transit where included.
- Owned plant, hired-in plant and employees’ tools under the applicable sections.
- Debris removal, professional fees and expediting expenses within stated limits.
- Public Liability and other extensions where arranged alongside the works.
Cover varies by insurer and applies only as stated in the schedule and policy wording.
BOUNDARIES
Common exclusions and limitations
- The cost of correcting defective design, materials or workmanship, subject to the wording’s treatment of resulting damage.
- Wear and tear, mechanical breakdown and gradual deterioration.
- Existing structures unless specifically declared and included.
- Consequential delay, liquidated damages and loss of revenue unless specialist delay cover is arranged.
- Unattended plant, theft, flood, subsidence, hot work or other hazards where policy conditions are not met.
This is not a complete list. The quotation, schedule and full wording determine the actual cover.
CLAIMS IN PRACTICE
How a claim might arise
01. Fire damages partially completed works and stored materials before handover.
02. Storm water enters an excavation and damages temporary and permanent work.
03. Hired plant is stolen from a secured site, creating replacement and continuing-hire costs.
These scenarios are illustrative only and do not confirm that a particular claim would be covered.
CHOOSING COVER
Questions worth resolving
- Read the construction contract before selecting the insured parties and basis of cover.
- Include the full contract value, free-issue materials, professional fees and anticipated escalation.
- Declare existing structures, basement work, excavation, demolition, piling and work near water.
- Align the policy period with delays, testing, handover and the maintenance or defects period.
- Check plant security, immobilisation, tracking, inspection and hired-in conditions.
CONNECTED RISKS
Related protection to consider
- Public and Employers’ Liability for injury and third-party property damage.
- Professional Indemnity for design responsibility and professional services.
- Latent Defects for certain defects discovered after completion.
- Delay in Start-Up or Advanced Loss of Profits for project revenue delayed by insured damage.
QUESTIONS
Frequently asked questions
Who should arrange Contractors All Risks?
The contract should determine responsibility. It may be the employer, developer, main contractor or a jointly insured arrangement.
Does it cover defective workmanship?
Wording varies. The defective element itself is often restricted, while resulting damage may receive different treatment.
Are existing buildings covered during refurbishment?
Only if the policy includes them with appropriate values and terms; contract works cover alone may not be enough.
Can hired plant be included?
Yes, but continuing-hire charges, security requirements, limits and the hire agreement need review.