Contractors All Risks (CAR) Insurance

Overview:
CAR insurance is tailored for builders and contractors, providing comprehensive protection for contract sites. It covers a wide range of risks, including materials, property, liability, and tools, ensuring contractors are safeguarded against unexpected events.

Scope

The policy is divided into two main sections:

Section I: Material Damage

Covers physical loss, damage, or destruction of insured property due to any cause except those specifically excluded in the policy.

Section II: Third-Party Liability

Provides legal liability coverage for:

  • Property Damage: Accidental damage or loss caused to third-party property.
  • Bodily Injury: Non-fatal or fatal injuries caused to third parties (excluding employees of the insured) during construction activities.

Key Benefits

  1. Material Damage Coverage:
    • Covers loss, damage, or destruction of insured property.
    • The claim is limited to the sum insured for each item or the total sum insured, whichever is applicable.
  2. Third-Party Liability Coverage:
    • Legal liability for accidental property damage or loss to third parties.
    • Legal liability for injuries or fatalities caused to third parties (excluding employees).

Perils Covered:

  • Fire and allied perils
  • Collapse
  • Earthquake (shock and fire)
  • Faults in construction
  • Storm, flood, cyclone, and tempest
  • Negligence or human error
  • Water damage

Add-On Covers

For an additional premium, coverage can be extended to include:

  • Logistical Costs: Express freight, holiday and overtime costs, airfreight
  • Additional Expenses: Breakage of glass, additional customs duty, clearance/removal of debris
  • Natural Events: Earthquake
  • Escalation Clause: Covers cost escalation during construction
  • Storage and Equipment: Storage at fabricators’ premises, construction equipment like scaffolding, contractor’s plant and machinery
  • Third-Party Liabilities: Cross liability
  • Maintenance Period Cover: For accidental loss or damage during maintenance visits or rectification work
  • Surrounding Property: Damage to owner’s surrounding property
  • Terrorism Coverage

Exclusions

The policy does not cover:

  1. Loss/damage due to faulty design.
  2. Rectification of aesthetic defects not resulting from accidents.
  3. Loss/damage due to defective material or workmanship (limited to affected parts).
  4. Gradual deterioration, rust, or atmospheric conditions.
  5. Loss discovered during inventory.
  6. Loss arising from penalties for delays or non-fulfillment of contract terms.

Claim Process

In case of a loss, follow these steps:

  1. Immediate Intimation: Notify the insurer and provide a written statement detailing the claim, nature, and extent of the loss.
  2. Mitigation: Take steps to minimize loss/damage.
  3. Proximate Cause: Assess the type and extent of loss to confirm if it falls within the policy scope.
  4. Cooperation: Assist the insurer and surveyor with the survey and loss assessment.
  5. Documentation: Provide necessary documents such as:
    • Completed claim form
    • Claim bill
    • Policy copy
    • Supporting records and proofs
  6. Damaged Property: Safeguard damaged property until disposal instructions are received from the insurer or surveyor.