Contractors all risk insurance is a type of cover that offers financial protection to builders and contractors against a wide range of liabilities and property-related risks.
Known as CAR insurance for short (but not the vehicle type), it is a package insurance policy covering multiple things and designed to meet the needs of construction companies – especially when there are potential injuries and damages to staff members, buildings and third parties and a lot is at stake to get the project completed within the desired timeframe.
What is Included in Contractors All Risk Insurance?
CAR insurance gives you the financial protection as a contractor or construction company. If there are any major delays, damages to the site, to your staff members or third parties, your cover will be able to compensate you for any losses or damages paid to the injured party or client. This includes legal costs in case you have to settle or pay compensation.
Rather than paying the huge burden out of your finances, the majority or all of this will be covered by your policy over – and you will not be worse off financially.
This policy covers any members of the public or physical property that may be damaged as a result of your construction work. A passerby falls or slips near or around your site? Or perhaps something falls off your truck and hits a neighbours car? Any medical bills, compensation or replacements can be paid for out of your public liability insurance.
For any of your staff members, by law, must be protected under employers liability. For any injuries or damages that occur due to their work activity, you are required to cover any medical bills, costs, damages or time off work that they have to endure.
There are many reasons that your construction project would be paused or interrupted including heavy snow or adverse weather, terrorism, covid or one of the partners running out of money. To ensure you get fully paid and do not lose out, your business interruption can help cover any financial losses, so you more or less receive the same and expected out of income.
How Much Does Contractors All Risk Insurance Cost?
The cost of your premium will depend on various factors including the contractor’s responsibilities, contractual requirements (length and roles), size of the project and the risk appetite. Get Indemnity offer policies starting from £39 per month or £468 per year and you can usually apply online or over the phone.
A basic policy will cover up to 10 employees and you will need to be open and honest about the size of the project, your claims history and your contractual obligations with the client.
Is Contractors All Risk Insurance Compulsory By Law?
No, whilst not obligatory by law, it is pretty much a requirement to trade or run a construction job smoothly. If you are a limited company and have employers under your belt, you will need employers liability to safeguard their health in the event of injury or damages.
In most cases, a company will not work with another construction company or contractor unless they have the right insurance cover in place, which is usually public liability and buildings insurance. With contractors all risk, you get a broader but more effective policy to cover all the potential risks and eventualities – so you can run your protect with peace of mind that all possibilities are covered for.