Benefits of the Contractor All Risk for Insured **

We know that every contract absolutely needs strict compliance with all terms and conditions by all parties.  So how to ensure that the construction contract were completed according to terms and conditions?   One of the solution is to use the Contractor's All Risks or CAR insurance.  To ensure the fulfillment of Contractor and sub-Contractor obligations  and the project can be handed over on schedule required contractor's All Risks Insurance. CAR Insurance is very useful to the project owner (Principal) and Contractor with Sub-contractor jointly.

Benefits for Insured

Benefits of contractor's all risk insurance for the insured party can be divided into 2 categories  :

   In General  :

Providing financial protection for the continuity of projects being undertaken by the Insured as the executor of the contruction project so that can be handed over to the owner of the project on schedule.

   Specifically  :

1.   Helps shorten the delay period of work
2.   Providing financial reserves are relatively small sum to cope  
      big losses that are sudden and unexpected
3.   Minimize unexpected costs due to Force majeure.

Force majeure (French for "superior force"), also known as cas fortuit (French) or casus fortuitus (Latin),^[1] is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term "act of God" (such as flooding, earthquake, or volcanic eruption), prevents one or both parties from fulfilling their obligations under the contract.^[2]

However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces For example, predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.

Period of insurance

Starting from the goods unloaded at the site beginning of the implementation / start of the contract, during construction and ends after the project is completed and handed over to the owner of the project. Coverage usually guarantee during the maintenance period.

Price coverage

1. Appropriate contract price of construction project work;
2. Value of plant and machinery / equipment;
3. Material prices.

Risks Covered

Almost all risks, except those mentioned as exceptions in the CAR insurance policy include WARRANT losses due to  :
1.    Fire;
2.    Lightning;
3.    Explosion;
4.    Crashing of Aircraft;
5.    Smoke
6.    Extinguish water;
7.    Flood / Inundation;
8.    Rain;
9.    Tsunami;
10.  Windstorm;
11   Earthquake;
12.  Landslide, Rockslide;
13.  Theft with the unloading force / Burglary;
14.  The lack of worker skills / Bad workmanship;
15.  Negligence, Carelesness;
16.  Human error and so forth.

The risks are not guaranteed (Exclusion)

Normally for such things as :
1.     SRCC (Strikes, Riot and Civil Commotion), but can also be 
        guaranteed as an extension *);
2.     Intentional / Wilfull act;
3.     Nuclear and radiation;
4.     As a result of termination of the project (Cassation of work);
5.     Fault design and all its consequences;
6.     Penalty;
7.     Inventory losses;
8.     Losses in the pictures, valuable documents, money, 
        and others.

*)      In certain limits these risks can be secured with an additional
         insurance premium.