Contractors All Risks insurance is an insurance policy designed to protect against the risk of physical loss or damage to works being undertaken, these “works” can be new build, alteration, repair or refurbishment and can be of structures or plant and equipment.
Contract All Risks insurance may also been known as Contract Works or Erection All Risks, possibly with slightly different wordings, but with the same primary intention.
Who needs contractors all risks insurance?
Contractors All Risks insurance is usually purchased by businesses in contracting trades, but should be considered by any party with a financial interest in the works.
Contractors usually assume the responsibility for insuring works, either by this being specifically stated in a formal contract or by the contractor just wanting to protect its financial interest.
How do I buy contractors all risks insurance?
Contractors normally arrange their Contractors All Risks insurance on an annual basis covering all of the contracts they undertake during the policy period.
Cover can be arranged by way of a specific policy or as part of a Contractors Combined policy covering Employers Liability and Public Liability amongst others.
Contract specific policies are available if an annual cover is not appropriate.
Project Specific Contract Works Insurance
Where the contract is particularly large or no one contractor assumes overall responsibility for insuring the works, it is common for the contract principal to arrange a project specific policy covering the whole of the contract to achieve certainty of cover and protection, rather than rely on the adequacy of different policies provided by a myriad of contractors and subcontractors.
Project policies can also include Public Liability, especially where a large limit of indemnity is required or the work is high risk, but not Employers Liability as this is not allowed due to the relevant legislation. Such project policies are arranged protecting the interests of the principal and contractors, so can be excluded from the contractors’ own insurance arrangements with the commensurate saving in premium.
What is the cover under a contract works policy?
As the name suggests, the basic cover is on an All Risks basis for loss or damage to permanent and temporary works. All Risks means that all loss or damage is covered unless excluded in the policy rather the protection being against named events or perils. The insurer has to show that an exclusion shown in the policy applies in order to avoid a claim in the event of loss or damage occurring to the insured works, rather than the insured having to demonstrate the loss or damage was caused by a peril specified in the policy. For more detailed information on the cover under a contract works policy visit our “Contractors All Risks Insurance Definition” page.
Are existing structures covered by contractors all risks insurance?
Of important note is that Contractors All Risks insurance does not cover damage to existing structures. Usually, these are insured by the structures’ owner on a property damage insurance. Some forms of contract require the principal to insure the existing structure in joint names with the contractor. It may be possible to extend the Contractors All Risks insurance to include existing structures, but any cover provided will be contract specific and the cover may be restricted to named perils only.
Insurance for Hired in Plant
Contractors All Risks insurances can commonly be extended to include loss or damage to own or hired plant. The cover for own plant is on an All Risks basis. Hired-in-Plant is covered on a legal liability basis, per the conditions of contract which should be no more onerous than the Contractors Plant Association (CPA) conditions unless specifically agreed with the insurer.
How much does contractors all risks insurance cost?
The premium you pay for contractors all risks cover will, for the majority of businesses, depend on a few key factors, your annual turnover, the annual charges for hired in plant and the value of any own plant and equipment and the value of any employees tools. It is simple to obtain a quotation that is specific to your requirements you can apply on-line or call us directly to discuss your requirements with a broker.
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