CAR (Contractors All Risks) insurance provides coverage for property damage and third-party liability claims that may occur during construction projects. It covers materials, equipment, and machinery on site. The policy scope includes sections for material damage and third-party liability, and covers risks like fire, earthquake, flood, and theft. Coverage begins when work starts and lasts until project completion, and can be extended to include maintenance periods. Eligible projects include buildings, roads, bridges, dams, and more. Underwriters require details on project type, location, construction methods, contractor, timelines, and sum insured to provide a quotation. The commission rate for CAR policies is 20%.

1. CAR
(Contractors All
Risks)
INSURANCE
PRODUCT

2. Objectives
The training is supposed to equip us with an understanding of the
following;
•Definition of CAR
•Scope of cover
•Cover Extensions provided
•Period of cover
•Projects Insurable under C.A.R/Markets
•Information required for quotation purposes
•Commission Rate

3. •Contractor’s All Risks;
 CAR insurance is a property insurance
for any building or civil engineering
project undergoing construction.
 It Covers on site work, materials, tools
and machinery during construction
period and, if required, during
maintenance period
 Legal liability to third parties can be
included
Definition: C.A.R Insurance

4. •Contractor’s All Risks;
Contractors' all risks (CAR) insurance is a non-standard insurance policy
that provides coverage for the two primary types of risks on construction
projects namely;
 property damage
 Third-party injury or damage claims
Definition: C.A.R Insurance

5. Scope of Cover
• CAR Covers the following broad areas;
I) Material Damage - Section A
ii)Third Party liabilities – Section B
 Third Party Liability
 Surrounding Property
In particular, the cover comprises the following :
 Contract Works
 Construction Plant And Equipment
 Construction materials on site
 Construction Machinery
 Costs For Clearance Of Debris

6. Scope of Cover cont…
• Policy Extensions provided under the policy Include;
Political violence and Terrorism
Delayed start up
Maintenance period
• Insurable Interest lies with the following;
Principal
Contractor
Subcontractor

7. Scope of Cover Cont...
C.A.R provides Cover for loss or damage
of insured property on the construction
site caused by any sudden and unforeseen
accidental cause not specifically excluded.
Some types of losses/damages may
include:-
Fire , lightning, crashing of aircraft,
Fire extinguishing water or other
fighting measures
Earthquakes, subsidence, landslide,
rockslide.

8. Scope of Cover Cont...
Flood, inundation, windstorm,
avalanches/tsunami etc
Burglary/Theft of materials on site
windstorm, typhoon, hurricane
Collapse ,damage due to foreign objects
(impact damages)
The basic concept of CAR insurance is to offer
comprehensive and adequate protection against all the
site risks involved in the construction of all types of
civil engineering works.

9. Period of Cover
• Cover comes into effect from the time of Commencement of Work or
immediately after the unloading of the items to be insured including
construction materials at the site (whichever is earlier) and continues until
the construction work has been completed and the project handed over to
the principal subject to the dates specified in the policy
•Cover can be extended in two situations;
 To include maintenance period to cover maintenance risks
 To allow completion of delayed project but subject to approval of insurer
and payment of additional premium

10. Markets (Some Projects Insurable Under C.A.R
Policy)
Construction of buildings for industries, office blocks, residential and
non residential houses, halls and stadiums
Construction of roads ,bridges, tunnels etc
Construction of dams, reservoirs, canals, dock piers, pipelines, silos etc
Water-Sewer lines, irrigation systems etc
Construction of towers, chimneys etc

11. INFORMATION REQUIRED FOR QUOTATION PROCESSING
The Insurer would wish to know the kind of risk he is going into and what
premiums to charge and thus the below should be considered;
What is being built: (single storey house, maisonettes, row of houses, multi
storeys, no. of basement, no. of storeys, etc, hospitals, schools, industrial
buildings, roads,( what type ; single, double carriageway etc)
Where is it being built:
How is it being built: Erection methods (New and unusual techniques or
normal techniques)
Who is the contractor:
When is it being built: (Period, Time factor(seasons to be covered by
contract period)
Sum Insured.

12. Contractors All Risks (C.A.R) Commission Rate:
20%
Commission Rates