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🏗️ '''Construction all risks (CAR) insurance''' is a specialized [[Definition:Property insurance | property insurance]] product designed to cover physical loss or damage to construction works, materials, and equipment during the course of a building or civil engineering project. Operating on an [[Definition:All-risks policy | all-risks]] basis, CAR insurance responds to any peril not specifically excluded — including fire, storm, flood, theft, collapse, and accidental damage — providing broad protection for the inherently hazardous and unpredictable environment of a construction site. The product is a cornerstone of the global [[Definition:Construction insurance | construction insurance]] market and is typically required by project owners, contractors, and lenders as a condition of contract or financing.

🔧 A standard CAR policy is structured around several key sections. Section I covers material damage to the contract works themselves, including permanent and temporary works, materials, and construction plant and equipment. Section II provides [[Definition:Third-party liability insurance | third-party liability]] coverage for bodily injury or property damage arising from the construction activities. Many policies also include extensions for existing structures (often relevant in renovation projects), removal of debris, professional fees, and expediting expenses to accelerate repairs. The policy period generally runs from project commencement through completion and handover, often extending into a maintenance or defects liability period during which the contractor remains responsible for rectifying faults. In practice, CAR policies are placed across all major insurance markets — through [[Definition:Lloyd's of London | Lloyd's]], Continental European carriers, and specialist construction [[Definition:Underwriter | underwriters]] in Asia and the Middle East — with [[Definition:Policy wording | wordings]] varying by market convention and the specific requirements of international construction contracts such as FIDIC terms.

🌍 For [[Definition:Underwriter | underwriters]], CAR insurance demands deep technical expertise in assessing construction methodologies, soil conditions, natural hazard exposures, and contractor capabilities. [[Definition:Loss ratio | Loss experience]] in this line can be volatile, with single events — a crane collapse, tunnel flooding, or major fire — generating claims that dwarf the annual [[Definition:Premium | premium]]. [[Definition:Reinsurance | Reinsurance]] plays a critical role in supporting capacity for large infrastructure projects, and many CAR placements involve layered programs with multiple carriers sharing the risk. In markets governed by [[Definition:Solvency II | Solvency II]] or equivalent frameworks, the capital charges associated with construction risks reflect this volatility. As global infrastructure investment accelerates — driven by urbanization, energy transition, and government stimulus programs — CAR insurance remains one of the most technically demanding and commercially significant specialty lines in the global insurance market.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Erection all risks (EAR) insurance]]
* [[Definition:Builders risk insurance]]
* [[Definition:All-risks policy]]
* [[Definition:Third-party liability insurance]]
* [[Definition:Contractor's liability insurance]]
* [[Definition:Delay in start-up (DSU) insurance]]
{{Div col end}}

Definition:Construction all risks (CAR) insurance - Revision history

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