Construction all risks (CAR) insurance for construction and erection work

CAR is the abbreviation of Construction All Risks. It is a construction and erection insurance that covers damage to the works in progress, regardless of who caused the damage. In that it differs fundamentally from liability insurance, which only pays once someone is liable for someone else's loss.

A single-project CAR policy applies to one project and suits a one-off or large job. A continuous CAR policy covers all works within a year up to a maximum contract sum per works and is more practical for contractors with many assignments. If a project exceeds that maximum, a separate policy is still needed for that works.

Both occur. Many specifications provide that the contractor arranges the insurance and that the client is included as a co-insured. On large projects the client takes out the policy and notifies all the parties involved. What matters is that only one CAR policy runs and that everyone is named on it.

That depends on the clause. Putting right the defective component itself is often excluded, while the consequential damage to the rest of the works is paid for. Some policies exclude design risk entirely. For pure financial loss arising from an advisory error, professional indemnity insurance is needed.

Only with the ancillary plant section, and then subject to forced-entry conditions: the hut or container has to be properly locked and an additional requirement about leaving machinery behind often applies. For expensive and mobile plant a separate plant policy is usually better, because it also provides cover away from the site.