Brief of Contractor’s All Risks Insurance *

Contractor’s All Risk insurance or CAR insurance  generally use in construction project.  CAR insurance is one of general insurance services which  give compensation of loss due to physical damage suffered by the insured during the execution of civil engineering works projects (generally). Damage and losses that are guaranteed to be a sudden, unexpected and occurred in project site.

Definition CAR Insurance

Contractor’s All Risk insurance is the Policy that covers all risks associated generally with construction project. Issued commonly under the joint of a contractor and a principal (client), it usually also includes public liability insurance.

CAR Is insurance covering the risks against loss and or damage to the project, demands / responsibilities on the other parties of the soul and object damage and workmanship / installation of machinery due to :
              -     Fire                           –      Flooding
              -     Lightning                   –      Earthquake
              -     Explosion                  –      Theft / Burglary 
              -     Flow Short

Part 1 :  Material Damage   (Material Damage)
Part 2 :  Liability to Third Parties   (Third Party Liability)

Part 1 : Material Damages

Policy cover loss or physical damage, the unexpected and suddenly from any cause, other than matters specifically exempted, in relation to the process of development or construction et cetera.

Insured Objects

Objects coveraged of Contractors' All Risks  Insurance can be  :

-      Contract Work including preliminary work, temporary buildings, materials
       stocks and usually included Value Added Tax (PPn)
-      Materials supplied by the principal or owner.
-      Heavy equipment or support machines work (construction plant and 
       equipment or machinery)
-      Cost of cleaning debris.

Period of Coverage Insurance

Policy Contractors' All Risks insurance (CAR insurance) shall take effect from the commencement of work or after unloading goods on site and ending on the part of the contract work that has been handed over or used plus the maintenance period.

Exception of Coverage CAR Insurance

-    War, terrorism, nuclear and radioactive
-    Volitionality by the Insured
-    Discontinued either total or partial work
-    Business disruption, including penalties, losses due to delays
·-   Design faults
-    Cost replacement or repair material / workmanship defects
      (defective materials and bad workmanship)
-    Aus, corrosion, the nature of the goods themselves
-    Damage to electrical or mechanical equipment or construction
      machinery
-    Damage to public vehicles
-    Damage to the file, pictures or notes (files and drawings)

Part 2: Third Party Liability

Policy of CAR insurance ensures the legal responsibility to third parties in connection with the execution of work on body injury,  property damages  and  costs  of  law.
a)    Bodily injury : bodily injury or third-party sick because of
       an accident (whether fatal or not),
b)    Property damages : losses or damages due to accidents to
        property owned by third parties
c)     Law costs and expenses : all costs and expenses of litigation
        that prosecutors obtained from the insured, and all costs and
        expenses incurred with the written approval of the Insurers

Additional Warranty Clauses of CAR Insurance

    MR 001 - Cover for Loss or Damage due to Strike, Riot and  
                         Civil Commotion (SRCC)

    MR 002 - Cover for Cross Liability

    MR 003 - Maintenance Visits Cover

    MR 004 - Extended Maintenance Cover

    MR 006 - Cover of Extra Charges for Overtime, Night Work,  
                         Work on Public Holidays,  Express Freight

    MR 007 - Cover of Extra Charges for Airfreight

    MR 013 -  Property in Off-Site Storage

    MR 100 -  Cover for Testing of Machinery and Installations

    MR 105 -  Cover for Existing Structures and or Surrounding  
                          Property

     MR 113 - Inland Transit

     MR 115 - Cover for Designer’s Risk

     MR 116 - Cover for Insured Contract Works Taken Over or 
                          put into Service

    MR 119 - Principal’s Existing Property / Property Belonging 
                         to or Held in Care, Custody or Control by the Insured

     MR 120 - Vibration, Removal or Weakening of Support

For more details see :  Contractors' All Risks  (CAR insurance) Clauses

Deductibles of CAR Insurance Claims

For CAR Insurance generally applicable provisions of Deductible - discounted claims of US $ 1,000 for small and medium projects up to US $ 10,000 for large projects.