In a construction project, a contractor is solely responsible for everything and anything that happens on the construction site. May it be an accident to the worker, injury to the third party, or any damage to the property or machinery, he has to bear the entire pain and still complete the project on time. Even a small financial disturbance can cause a significant loss and interrupt the construction, no matter how small or big the construction project is. Hence, it is essential for every contractor to equip himself with right kind of insurance to protect his business from unpredictable losses.
Today, many insurance companies are offering insurance policies for contractors. However, choosing an absolute policy that can help the contractors face any kind of unanticipated losses makes the difference. In this article we will discuss about one such policy, popularly called as Contractors’ All Risk insurance (CAR).
What is Contractors’ All Risk insurance?
Contractors’ All Risk insurance is a comprehensive policy designed to cater the insurance needs of the builders, contractors and construction traders. The nature of the policy to cover all the eventualities and risks to the business as well as to the individuals makes it much useful for the contractors.
Types of risks involved in the construction arena
We can broadly divide the risks involved in the construction projects into two types damages to the property and damages to the third party at the construction site.
Damage to the property: Property at the construction site can be anything like the building under construction, machinery, equipment, materials, employee tools, etc., which are either owned or leased. Any damage to such property due to constructional failure, theft, and machinery damage can cause significant financial losses and also interrupts the construction process. CAR insurance effectively provides cover to all such damages and losses and thus, saves the contractor from sudden losses and business interruptions.
Loss from the liability claims: Apart from the internal issues, litigation filed against the contractor, either by the workers or by the third party for injury/death/damage caused to them, as a result of the contractors’ negligence can create financial burden.
In the absence of proper insurance, the contractor has to face all the legal issues, lawyer costs, court proceeding costs, and if the case goes in favour of the other party, he has to pay huge amounts to compensate them for the loss. CAR insurance, which includes both public and employers liability insurance policies, offers protection against all such legal claims.
Thus, by covering all the major risks involved in the construction projects, Contractors’ All Risk Insurance is considered as a comprehensive policy.
Approach a reputed brokerage for better deals
What makes CAR insurance policy more functional is the company from which you purchase the policy. Policies like CAR are not fixed; the policies covered under the policy vary from company to company. Hence, choosing a company which can offer an insurance policy that covers entire risks involved in your specific business type or construction project is always an intellectual approach. For choosing such company, it’s always better to approach a reputed insurance brokerage firm which offers tailor-made products that suit your requirement.