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🏗️ '''Contractors' all risks (CAR)''' refers to a widely recognized class of [[Definition:Insurance coverage | insurance coverage]] that protects construction projects against physical loss or damage on an [[Definition:All risks insurance | all-risks]] basis throughout the construction period. Known by slightly different names across markets — "contractors' all risks," "[[Definition:Contractors all risks (CAR) insurance | contractors all risks insurance]]," and "[[Definition:Construction all risks insurance | construction all risks]]" are all common variants — CAR coverage has become a foundational product in the global [[Definition:Engineering insurance | engineering insurance]] market. The policy is designed to wrap the interests of project owners, principal contractors, and subcontractors into a single program, reducing the risk of uninsured gaps that could otherwise arise when multiple parties carry separate policies.

🔧 In practice, a CAR policy is triggered when construction work commences and typically remains active until the project is handed over to the owner, with many wordings extending through a maintenance or [[Definition:Defects liability period | defects liability period]]. Coverage under Section I — the material damage section — responds to accidental loss or damage to the works, whether caused by fire, storm, flood, theft, collapse, or human error, subject to specific exclusions such as wear and tear, faulty design (depending on the wording and jurisdiction), and war. Section II provides [[Definition:Third-party liability insurance | third-party liability]] protection. Because construction projects vary enormously in scale and complexity, [[Definition:Underwriting | underwriters]] tailor each policy through negotiations with the [[Definition:Insurance broker | broker]], adjusting [[Definition:Deductible | deductibles]], sub-limits, and extensions to fit the risk profile. In subscription markets like [[Definition:Lloyd's of London | Lloyd's]], large CAR placements are commonly shared across multiple [[Definition:Lloyd's syndicate | syndicates]], with a lead underwriter setting terms that following markets accept.

📊 The enduring relevance of CAR coverage within the insurance industry stems from its role as an enabler of economic development. Without reliable construction insurance, banks and development finance institutions would face unacceptable exposure, and many projects would never break ground. For insurers and [[Definition:Reinsurance | reinsurers]], CAR is a technically intensive class that rewards deep expertise in engineering risk and [[Definition:Catastrophe modeling | catastrophe modeling]] — particularly as climate change amplifies flood, windstorm, and wildfire risks at construction sites worldwide. Regulatory expectations also shape the market: [[Definition:Solvency II | Solvency II]] capital requirements in Europe and equivalent regimes in Asia influence how much CAR exposure insurers can carry on their balance sheets. The class continues to evolve as new construction methods, modular building technologies, and digital risk management tools reshape both the risks and the way they are underwritten.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Construction all risks insurance]]
* [[Definition:Contractors all risks (CAR) insurance]]
* [[Definition:Erection all risks (EAR) insurance]]
* [[Definition:Engineering insurance]]
* [[Definition:All risks insurance]]
* [[Definition:Project insurance]]
{{Div col end}}

Definition:Contractors' all risks (CAR) - Revision history

PlumBot: Bot: Creating new article from JSON