0807777771

INSURANCE FOR THE CIVIL & CONSTRUCTION INDUSTRY

CALL US ON 080 777 777 1

Why you need Contractors’ All Risk insurance

by | May 5, 2015 | Construction Liability, Contractors All Risk | 0 comments

Contractors All Risk Insurance | CivilSure

When it comes to the planning and organizing of a new construction project, insurance doesn’t always get the priority it requires. Very often it is left to the last minute or even after the work has commenced. Should you apply for a Contractors All Risk Insurance Policy after you have begun civil works or construction, this is known as a take on and must be declared.

All construction work, no matter the size or complexity of the project, contains an element of risk. This will vary from project to project but risks common to all construction works include natural disasters, fire, theft, transit, construction collapse, defective design, defective workmanship or materials, malicious damage to property and third party liability exposures.

Contractors All Risks insurance “CAR” (also referred to as Contract Works insurance or Construction Insurance ) typically provides an all

risks cover during the construction period for the cost of physical loss or damage to building and civil works, advanced loss of profits/revenue/income, public liability, installation and constructional plant/machinery including hired-in plant and tools where you are responsible under Contractors Plant Hire Association (“CPHA”) conditions or a standard conditions of Hire Contract.

The basic principle is that Contractors All Risks Insurance (“CAR insurance”) covers those losses not covered by an ‘excluded peril’. The benefit to the contractor also known as the “insured” under this type of policy is that the burden is shifted to the insurer who, to repudiate or reject the claim, is required to show that the cause of the loss falls within an exclusion.

Most commonly, Contractors All Risk insurance is underwritten on an annual policy covering all projects as well as plant and machinery, but is also available to cover single projects for more specific extensions as well. Annual Contractors All Risk cover is quite beneficial. Advantages of Contractors All Risk Insurance include a fixed rate for 12 months, all projects are covered- no matter the size and of course if you have an annual policy you will never forget to insure a construction site.
CAR contracts exclude cover for risks such as defects due to wear and tear, obsolescence (outmodedness or oldness), deterioration, rust and mildew, loss and damage arising out of war, nuclear, political, computers and for faulty workmanship and faulty design.  Cover for faulty workmanship, faulty design, errors and omissions are more specifically insured under Design and Construct Professional Indemnity policies.

Contractors’ All Risks insurance is usually taken out in the joint names of the contractor and the employer. Other interested parties, such as funders, often ask to be added as a joint name or request their insurable interest to be noted on the policy. The theory is that if damage occurs to the insured property then, regardless of fault, insurance funds will be available to allow for restoration and reinstatement.

As we are niche insurance advisors to the construction industry we have an understanding of your risks and are able to advise you accordingly. Let us help you with the insurance side of planning and organizing your construction projects.

To read our blog on The Meaning of Having Your Name On a CAR Policy, click here.

Click here to get a quote.

Click here for more info.

by Daniel Gussenhoven & Pam Claasen

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

RELATED POSTS

Some dos and don’ts when managing a Contractor’s All Risk claim

INSURANCE FOR THE CIVIL & CONSTRUCTION INDUSTRY CALL US ON 080 777 777 1 Some dos and don'ts when managing a Contractor’s All Risk claim. Contractor’s All Risk claim , our knowledge of the industry is our key advantage in achieving outstanding claims success. Building...

What is ‘Practical Completion’?

Practical Completion doesn’t mean the Contractor has finished the Works in every detail. It means the Works are sufficiently complete to be safely used by the Employer for the purpose he intended. The Contractor may still complete minor items and fix defects after Practical Completion, as long as the Employer isn’t inconvenienced.

What does Contractors All Risk cover include?

INSURANCE FOR THE CIVIL & CONSTRUCTION INDUSTRY CALL US ON 080 777 777 1 What does Contractors All Risk cover include? Contractors All Risk (CAR) insurance is usually provided on a monthly or once-off basis and provides protection for individual construction...

What Are Latent Defects?

A Latent Defect is a defect that is not detected by ordinary inspection, but lies hidden until sometime later, when it’s discovered because it causes a problem that everyone can see.  An example of latent defects would be weak concrete in part of a bridge column, that looks the same as strong concrete, but collapses when a heavy truck drives over the bridge.

What is not covered by a Contractors All Risk Policy?

The main part of the Contractors All Risks insurance is the Contract Works section which provides cover for the property being worked on (e.g. new house, etc.). But it’s important to be aware of what’s not covered by a contractors all risk policy, these are just a few examples:

Plant Hire – Have you read the Contract?

Have you read your plant hire contract? You should get evidence of the plant hire contract when you hire in a concrete pump truck or any other item of plant.

What is Plant All Risk Insurance?

Your onsite machinery (plant) is vulnerable to a number of problems such as breakdowns, vandalism and theft. Missing a project deadline can be bad news for your bottom line as well as your reputation. Plant All Risk Insurance covers you for loss of, or damage to, construction plant and equipment whilst in storage, transit, on the contract site or being use as a tool of trade.

Construction of the Tallest Building in South Africa

Read the history >> Construction of the tallest building in South Africa, the Carlton Centre. Built in 1973 and designed by architects Skidmore & Owens.

What is the Defects Liability Period?

The Defects Liability Period starts when the Certificate of Completion is issued and continues for the period agreed to in the Contract. During the Defects Liability Period, the Contractor has to obey all written instructions from the Engineer to carry out repairs and fix any defects which appear in the Permanent Works, so that, at the end of the Defects Liability Period, the Permanent Works are in the condition required by the Contract.

Determining The Value Of Your Plant

To determine the value of construction plant we investigate Market Value, Fair Market Value, Replacement Cost, Replacement Value & Actual Cash Value

CALL US ON 080 777 777 1

Pin It on Pinterest

Share This