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🏗️ '''Construction all risk (CAR)''' is a broad-form [[Definition:Property insurance | property insurance]] policy designed to cover physical loss or damage to a construction project during the course of building works. Often referred to interchangeably with [[Definition:Construction all-risk (CAR) insurance | construction all-risk insurance]] or builder's risk coverage, a CAR policy typically protects the contract works themselves, materials on-site and in transit, temporary structures, and — depending on endorsements — existing property of the project owner. It is a cornerstone of construction-sector [[Definition:Risk management | risk management]] and is routinely required by project owners, lenders, and [[Definition:Surety | surety]] providers before ground is broken.

📐 CAR policies operate on an [[Definition:All-risk | all-risk]] (or "open perils") basis, meaning they cover any cause of loss unless specifically excluded. Common exclusions include wear and tear, defective design (though resulting damage may be covered under certain wordings), war, and nuclear events. The [[Definition:Sum insured | sum insured]] generally reflects the full completed value of the project, including materials and labor, and adjusts as the project progresses. [[Definition:Deductible | Deductibles]] vary by peril — with higher retentions often applying to [[Definition:Natural catastrophe | natural catastrophe]] perils such as earthquake or flood. Policies can be arranged on a single-project or annual basis, and they may include [[Definition:Third-party liability insurance | third-party liability]] sections covering bodily injury or property damage to adjacent structures caused by construction activities.

💼 Given the scale and complexity of modern construction projects, CAR coverage is a major line of business for [[Definition:Specialty insurance | specialty insurers]] and [[Definition:Lloyd's syndicate | Lloyd's syndicates]] with engineering expertise. [[Definition:Underwriting | Underwriters]] evaluate project-specific variables — soil conditions, contractor track record, construction methodology, and [[Definition:Catastrophe exposure | catastrophe exposure]] at the site location — to price the [[Definition:Risk | risk]] accurately. For [[Definition:Insurance broker | brokers]] arranging CAR programs, structuring the right combination of primary and [[Definition:Excess insurance | excess]] layers, coordinating with [[Definition:Reinsurance | reinsurers]], and ensuring that all project stakeholders are properly named as insureds is critical to avoiding coverage gaps that could derail a multi-million-dollar development.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Construction all-risk (CAR) insurance]]
* [[Definition:Builder's risk insurance]]
* [[Definition:All-risk]]
* [[Definition:Engineering insurance]]
* [[Definition:Project insurance]]
* [[Definition:Delay in start-up (DSU) insurance]]
{{Div col end}}

Definition:Construction all risk (CAR) - Revision history

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