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🏗️ '''Contractors all-risk insurance''' (commonly abbreviated as CAR insurance) is a comprehensive [[Definition:Property insurance | property insurance]] policy designed to cover physical loss of or damage to construction works, materials, plant, and equipment during the course of a building or civil engineering project. As an [[Definition:All-risk insurance | all-risk]] policy, it responds to any peril not specifically excluded — including fire, storm, flood, theft, collapse, and accidental damage — rather than listing covered perils individually. CAR insurance is a cornerstone of [[Definition:Construction insurance | construction insurance]] programmes worldwide, purchased by contractors, project owners, or joint ventures depending on contractual requirements and local market practice.

⚙️ A typical CAR policy is divided into several sections. Section I covers the contract works themselves, including permanent and temporary works, materials on-site and in transit, and often extends to cover the contractor's own plant and equipment. Section II provides [[Definition:Third-party liability insurance | third-party liability]] coverage for bodily injury or property damage arising out of the construction activities. Some markets add further sections for [[Definition:Advance loss of profits insurance | advance loss of profits]] (also called delay in start-up or DSU), which compensates the project owner for revenue lost due to insured damage delaying project completion. The [[Definition:Sum insured | sum insured]] typically reflects the full completed contract value, and the policy period runs from project commencement to handover, sometimes including a [[Definition:Maintenance period | maintenance or defects liability period]]. Underwriting considerations include the project's scope and complexity, the contractor's experience, geotechnical conditions, and natural catastrophe exposure. In markets governed by [[Definition:Solvency II | Solvency II]] or equivalent frameworks, CAR business is classified under engineering or construction insurance classes, while at [[Definition:Lloyd's of London | Lloyd's]], it falls within the marine, property, and specialty divisions depending on the syndicate.

🔍 The importance of CAR insurance is inseparable from the scale and risk intensity of global construction activity. Every major infrastructure project — from highways and bridges to commercial towers and energy installations — relies on some form of construction all-risk coverage to protect the substantial capital at stake during the vulnerable building phase. In many jurisdictions, including across the Middle East, Asia-Pacific, and continental Europe, project finance lenders and government procurement bodies mandate CAR insurance as a condition of contract award or loan disbursement. Standard contract forms such as [[Definition:FIDIC | FIDIC]] (used widely internationally) and JCT (common in the UK) prescribe insurance obligations that typically align with CAR policy structures. As climate change intensifies weather-related exposures on construction sites and as projects grow more complex — particularly in offshore wind, tunneling, and high-rise construction — [[Definition:Underwriter | underwriters]] have refined CAR policy terms, introducing sub-limits for natural catastrophe perils and tightening exclusions for design defects, making careful policy review an essential part of any project's [[Definition:Risk management | risk management]] framework.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Construction insurance]]
* [[Definition:All-risk insurance]]
* [[Definition:Course of construction insurance]]
* [[Definition:Third-party liability insurance]]
* [[Definition:Advance loss of profits insurance]]
* [[Definition:Engineering insurance]]
{{Div col end}}

Definition:Contractors all-risk insurance - Revision history

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