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Contractor’s All Risk Policy

The Contractor's All Risk Policy is intended to safeguard the Contractor and the Principal against any significant financial losses that may arise from unexpected accidents during the construction of building and civil engineering projects. These losses may include damage to the contract works, construction of plant and machinery, as well as third-party claims. This insurance policy is specifically tailored to provide comprehensive coverage and protection against unforeseen risks that may arise during the course of the project.

Who needs Contractor’s All Risk Policy?

Typically, it is mandatory for the contractor to obtain a Contractor's All Risk Policy in their joint names with the Principal before the project's start date, as per their agreement. Although the Principal or the contractor may purchase the policy, the obligation usually falls on the contractor. The policy provides essential coverage to safeguard against any unforeseen accidents that may result in significant financial losses during the project's execution, making it a crucial requirement for those involved in construction and civil engineering works.

Why do you need Contractor’s All Risk Policy?

The Contractor's All Risk Policy provides clients with extensive insurance coverage against any potential risks from the time the materials are unloaded at the project site through the storage, physical construction, erection, testing, and maintenance stages, if covered. This policy offers a comprehensive and complete solution to safeguard against unexpected accidents, damages, and losses that may occur during the entire course of the project. Therefore, it is an essential requirement for anyone involved in construction or civil engineering works to ensure the protection of their financial interests and mitigate any potential risks.

It also covers losses to tangible property on or around your premises or resulting from the use of your products or services. By obtaining this policy and obtaining prior consent from the insurance company within the policy period, you can protect yourself against any legal expenses incurred in such uncertain situations. This policy will allow you to continue your work smoothly without any hindrance, even in the event of liability issues.

What is covered in Contractor’s All Risk Policy?

Location Risks: This category includes risks such as fire, lightning, theft, burglary, and housebreaking that may occur at the project site.

Testing and Commissioning Risks: This category encompasses potential risks during the testing and commissioning stage, such as failure of safety devices, electricity leakage, insulation failure, short circuits, and explosions.

Act of God: This category includes natural calamities such as storms, tempests, hurricanes, floods, inundations, subsidence, landslides, rockslides, and earthquakes.

Handling Risks: This category covers risks related to the handling of materials and equipment during the construction process, such as impact from falling objects, collisions, and failure of cranes or tackles.

Risk of Human Element: This category comprises risks resulting from human actions such as carelessness, negligence, faults in erection/construction, strikes and riots, malicious damage, and terrorism.

Testing Perils: This category includes risks that may occur during testing and may have a maximum value at risk. A specific request needs to be made to the Underwriter for coverage of such risks.

What is not covered in Contractor’s All Risk Policy?

War and Allied Perils: This category encompasses risks related to war, acts of foreign enemies, invasion, acts of terrorism, and any other perils associated with war.

Willful Act or Willful Negligence: This category includes any loss or damage caused by the intentional or deliberate act or negligence of the insured or their representatives.

Excess Clause: This category specifies the excess amount that the insured is responsible for in each claim as outlined in the policy.

General Exclusions: This category excludes coverage for damages resulting from normal wear and tear, gradual deterioration, lack of use, obsolescence, rust, and any damages or penalties incurred by the insured due to failure to meet the terms of delivery or completion under their construction contract.

Nuclear and Allied Perils: This category includes risks associated with nuclear energy, radioactive contamination, and any other perils allied to nuclear risks.

Cessation of Work: This category pertains to losses resulting from the stoppage of work for any reason, including financial, contractual, or any other cause.

Losses Discovered at the Time of Inventory: This category covers losses that are only discovered during the inventory-taking process.

Faulty Design, Defective Material, or Casting: This category excludes coverage for any loss or damage caused by a faulty design, defective material, or casting other than faults in erection.

Consequential Loss or Liability: This category excludes coverage for any consequential loss or liability of any kind that may result from the loss or damage.