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Contractors All Risk Insurance (CAR)

Brief Description

The contractor all risks policy is specially designed to cover for loss or damage to predominantly civil engineering construction projects ranging from small villa to construction of bridges or high rise. This is an “All Risk” policy covering various activities of construction (except specific exclusions as mentioned in the policy). The policy covers all the works to be performed under the contract whether they are preparatory, provisional or final together with all the materials and equipment constituting them. This policy can be taken out in the joint names of the contractor and the employer.


This policy enables the Contractor or Employer to comply with the insurance requirements of the contract. Cover can be extended to include constructional plant as part of the Contractor All Risks cover

What It Covers ?

Section 1 – Material Damage: It covers almost any sudden and unforeseen physical loss or damage occurring (except as specifically excluded in the policy) to the contract works/property/items insured, during the period of insurance.

Section 2 – Third Party Liability This section in respect of third party liability of which we shall become legally liable to pay as damages consequent upon:

  • Accidental bodily injury to or illness of third party
  • Accidental loss or damage to property belonging to third party. Duration of cover corresponds with the contract period which is stipulated in the Letter of Award.

Possible Extensions

On request, with additional premium, the policy can be extended to cover various optional extensions namely:

  • Construction Plant and Equipment
  • Construction Machinery
  • Removal of Debris Costs
  • Surrounding Property
  • Transit to or from the site (excluding sea or air transit)
  • Maintenance cover
  • Professional Fees for Architects, Engineers, Surveyors etc. for the reinstatement of damage

Normal Exclusions

  • War, Civil War, Political Risk
  • Terrorism and Sabotage
  • Nuclear reaction, nuclear radiation or radioactive contamination.
  • Willful act or willful negligence of the insured or his representatives.
  • Cessation of work whether total or partial.
  • Losses within the compulsory access.
  • Loss due to faulty design
  • Wear and tear
  • Loss or damage discovered at the time of taking an inventory.
  • The cost of replacement, repair or rectification of defective material and/or workmanship
  • Mechanical and/or electrical breakdown or derangement of construction plant and machinery
  • Consequential loss of any kind
  • Seepage, Pollution and Contamination

Note: This list is non-exhaustive. Please refer to the sample policy contract for the full list of exclusions under this policy

Period Of Insurance

Period Start The cover starts on the unloading of the first consignment at site or commencement of work and continues to be in force as stated in the policy.

Period End The policy ceases when the project is handed over to the principal or put into service. Any extension of the contract period can be considered subject to advance notification to insurer via written declaration and submissions of additional documents.

Sum Insured

You must ensure that your sum insured stated in the Schedule shall not be less than

  • The full value of the contract works at the completion of the contract (inclusive of transport charges, customs duties, etc.)
  • The replacement value of construction, plant and machinery (if any). If the sum insured stated in the schedule is less than the amount required to be insured at the time of loss (i.e. under- insurance), you are deemed to be self-insuring the difference. The average condition will apply in the event of claim.

Contribution condition – If at the time any claim arises under the policy, there is any other insurance covering the same loss, damage or liability, insurer shall not be liable to pay or contribute more than its ratable proportion of any claim for such loss, damage or liability.

Key Benefits

The policy covers

  • Tailor-made product for the construction industry.
  • Cover on all risks basis
  • Cover legal liabilities to third parties arising out of the performance of the contract.
  • It is also possible to have an annual policy issued for all work undertaken by a contractor

Notes

There is no cancellation condition under this policy.

Machinery Insurance (CPM)

Brief Description

CPM Insurance is to provide a cover on annual basis to a contractor who may be using his plant and machinery at different projects during the course of the year. This policy provides coverage for the plant and machinery used by the contractors at the site for various projects. The cover is not limited to a specific project site. It is operative at all the sites wherever the plant and machinery is in use. The insured have to be informed of the sites where the insured items are being used.

What It Covers ?

The Policy coverage includes any unforeseen and sudden physical loss or damage to the Insured items due to any cause including:

  • Burglary, theft, riot, strike and malicious damage.
  • Fire and lightning, External explosion, Earth Quake, Flood, Subsidence, Inundation, Landslide and Rockslide
  • Storm, tempest, hurricane, typhoon and tornado
  • Accidental damage while at work due to faulty man handling, dropping or falling or collapse, collision and impact.

The Insured shall be indemnified for any loss or damage to the insured item while it is being used/installed at the site against unforeseen and sudden physical damage to the machinery by any cause provided the same is not specifically excluded under the Policy.


Possible Extensions

On request the policy can be extended to cover various optional extensions namely:

  • Third Party Liability
  • Escalations
  • Air Freight
  • Additional Custom Duty
  • Owners Surrounding Property
  • Express Freight
  • Holiday Rates
  • Overtime wages
  • Cost incurred in the clearance and removal of debris

Normal Exclusions

The policy shall not cover loss or damage due to the following:

  • Electrical, Electronic or Mechanical Breakdown failure or breakage without the operation of any external peril.
  • Loss or damage to replaceable parts which have limited life such as bits, knives, ropes, belts, chains etc. etc.
  • Loss or damage due to explosion of any boiler or pressure vessel.
  • Loss or damage to any water borne vessel and crafts, sinking or damage by sea waters or tides.
  • Loss or damage sustained during the transit from one location to another.
  • Damage while working underground
  • War and war-like situations including nuclear risks.
  • Willful Negligence
  • Direct consequence of the continual influence of operation e.g. wear and tear, corrosion, rust, collisions and depreciation. Vehicles designed and licensed for general road use
  • Total or partial immersion in tidal water
  • Damage occurred whilst any Insured item is undergoing a test of any kind
  • Consequential loss or liability of any kind

Note : This list is non-exhaustive. Please refer to the sample policy contract for the full list of exclusions under this policy.

Period Of Insurance

Duration of cover is for one year. You need to renew your insurance policy annually

Sum Insured

The sum insured should equal to the cost of replacement of the same kind and capacity via cost of replacement including freight, dues and custom duties plus cost of erection.

If the sum insured is less than the amount required to be insured at the time of loss (i.e. under-insurance), you are deemed to be self-insuring the difference. The average condition will apply in the event of a claim. Every item if more than one shall be subject to this condition separately.

Contribution condition – If at the time any claim arises under the Policy there is any other insurance covering the same loss, damage or liability, we shall not be liable to pay or contribute more than its ratable proportion of any claim for such loss, damage or liability

Key Benefits

The policy covers

  • Covers loss or damage to plants and machinery.
  • This policy provides protection against loss or damage from any cause not specifically excluded in a manner necessitating repair or replacement.
  • It covers the insured items which are at work or at rest, or being dismantled for the purpose of cleaning or overhauling or in the course of the aforesaid operation themselves, or in the course of subsequent re-erection.

Notes

You may cancel your policy by giving written notice to insurer. Upon cancellation, you are entitled to a refund of the premium less premium based on their short period rates for the period of the policy which has been in force, subject to the minimum premium to be retained by them.

Erection All Risk Insurance

Brief Description

The Erection All Risk policy is specially designed to cover loss or damage to projects that involves erection/installation of plant, machinery and equipment ranging from erection of a single machine to a large power plant.


This is an "All Risk" policy covering various activities of erection/installation, testing and commissioning of plant and equipment (except specific exclusions as mentioned in the policy). It protects a contractor or employer against physical loss or damage to the contract works, construction plant and equipment or machinery. It also includes cover for damage to property of third parties and bodily damage to third parties.


The policy can be taken out in the joint names of the contractor and the employer. This policy enables the Contractor or Employer to comply with the insurance requirements of the Contract

What It Covers ?

Section 1 - Material Damage (MD) It provides cover against sudden and unforeseen physical loss or damage in respect of all the risks involved in the erection and installation of machinery, plant and steel structure of any kind, during the period of insurance.

Section 2 - Third Party Liability This section in respect of third party liability of which we shall become legally liable to pay as damages consequent upon:

Possible Extensions

On request, with additional premium, the policy can be extended to cover various optional extensions viz.

  • Civil Engineering Works
  • Equipment for Erection
  • Removal of Debris
  • Professional Fees
  • Surrounding Property
  • Transit to or from the site (excluding sea or air transit)
  • Testing and commissioning
  • Maintenance cover
  • Professional fees for architects, surveyors etc. for the reinstatement of damage, etc

Normal Exclusions

This policy does not cover certain losses such as:

  • War, Civil War and any act of terrorism
  • Radioactive and nuclear energy risks
  • Willful acts or willful negligence
  • Wear and tear
  • Faulty design , defective material or casting and/or bad workmanship
  • Mechanical and/or electrical breakdown or derangement of construction plant and machinery
  • Consequential loss of any kind, including penalties, losses due to delay, lack of performance, loss of contract
  • Seepage, Pollution and Contamination
  • Asbestos

Note : This list is non-exhaustive. Please refer to the sample policy contract for the full list of exclusions under this policy.

Period Of Insurance

Period Start The cover starts on the unloading of the first consignment at site or commencement of work and continues to be in force as stated in the policy including the test run period.

Period End The policy ceases when the project is handed over to the principal or put into service.Any extension of the contract period can be considered subject to advance notification to insurer via written declaration and submissions of additional documents.

Sum Insured

You must ensure that your sum insured stated in the Schedule shall not be less than

  • The full value of the erection works at the completion of the contract. That is the completely erected value of the plant and machinery inclusive of freight, customs duties and cost of erection.
  • The replacement value of construction, plant and machinery (if any)

If the sum insured stated in the Schedule less than the amount required to be insured at the time of loss (i.e. under- insurance), you are deemed to be self-insuring the difference. The average condition will apply in the event of a claim.

Contribution condition – If at the time any claim arises under the Policy there is any other insurance covering the same loss, damage or liability, we shall not be liable to pay or contribute more than its ratable proportion of any claim for such loss, damage or liability.

Key Benefits

The policy covers

  • Cover can be designed according to the specific needs of the project
  • Optional extensions which can be tailored to suit individual customer's needs
  • It is also possible to have an annual policy issued for all work undertaken by a contractor

Notes

There is no cancellation condition under this policy.

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