Contractors All Risk Insurance

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What is a Contractors’ All-Risk (CAR) Policy?

Contractors’ All-Risk Insurance is an insurance policy that protects contractors from the risk of material damage and third-party claims.

The term ‘all-risk’ specifically refers to the cover under the contract works section. Any loss or damage to property, including third-party claims, will be covered by a contractor’s all-risk policy. It provides comprehensive protection to the contractors by covering every risk except the specified exclusions.

This policy covers the losses that may arise during a project due to accidents, natural disasters, and other unfortunate events. Contractors’ All-Risk Policy also protects the contractors from third-party liabilities arising from bodily injury & property damage.

CAR Policy

Who Needs Contractors’ All-Risk Insurance Policy?

Every business entity undertaking a construction project needs a CAR policy under UAE laws. Contractors’ All-risk Insurance UAE is significant for:


Companies that own or manage construction projects, such as builders and developers


Contractors and sub-contractors who are responsible for completing the construction projects


Property owners

Finance Companies

Finance companies that provide financial support to the construction projects

Common Risk Scenarios in Contractors’ All-Risk Policy

Contractors’ All-Risk Insurance policy protects the contractors from material losses and third-party liabilities. Some of the common risk scenarios in a construction all-risk policy are:

Loss or damage to property due to fire & explosion, flood, earthquake, storm, riot, strike, burglary, and malicious damage

Accidental damage to contract works & materials

Accidental or malicious damage to property by employees or any third-party

Loss or damage to materials in transit

The partial or total collapse of structures

Loss or damage due to sub-standard work or use of deficient materials by the contractor

Loss or damage to property arising from a faulty design by the contractor

Loss or damage due to the supply of defective machinery by the contractor

Third-party claims arising from bodily injury or damage to their properties

What is Covered Under Contractors’ All-Risk Insurance?

Contractors’ All-Risk Insurance UAE covers the following risks:

Additionally, the contractors can also opt for these add-on covers to get additional coverage.

What is Not Covered Under Contractors’ All-Risk Insurance?

Please study the policy document carefully to know the risks that are not covered by the policy. Some of the standard exclusions in a contractors’ all risk policy are:

Why Do You Need to Buy a Contractors’ All-Risk Insurance Policy?

The Contractors’ All-Risk Insurance policy provides a safety net for the contractors and protects them from various risks.

Accidents can happen at any time, especially at construction sites CAR policy provides coverage for incidents that could result in worker death, disability, or bodily injury on a construction site.

The contractors’ all-risk policy provides comprehensive protection and minimizes their financial losses

Any loss or damage to the project due to accidents & natural calamities is covered

The policy covers the loss due to burglary, riot, strike, and civil commotion at the project site

The policy protects the contractors from third-party claims arising due to physical injury and damage to property

Contractors can also buy add-on covers to get enhanced protection

Frequently Asked Questions About CAR Policy

The liability for contractors can be several hundred million, depending on the project size. The CAR policy protects them from financial losses due to accidents, natural disasters, burglary, and third-party liabilities associated with the project.

A contractor’s all-risk insurance policy will cover the damages to contract work and any third-party claims that arise due to the construction work. But a professional liability insurance policy will cover the claims for negligence and defective services provided by a professional.

Yes. Whenever any accident happens that damages the contract work & materials, the policyholder is required to inform the insurer immediately after the accident.

Insurance companies fix the premium based on their analysis and risk assessment. So the premium is based on several factors:


  • Nature & size of the project
  • Project Location
  • Estimated time for project completion
  • Adoption of safety standards & regulations
  • Contractor’s track record and experience
  • Claims history of the contractor


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