INSURANCE GUIDE
Contractors All Risks Insurance UK
Contract works, plant and third-party liability cover for UK building and civil engineering contractors.
TL;DR
- Contractors all risks (CAR) insurance covers the physical works, materials and plant on a construction project.
- Standard public liability does not cover damage to the works themselves - CAR insurance fills this gap.
- Most main contractor and client contracts require CAR insurance as a condition of appointment.
- CAR can be arranged by the main contractor to cover all parties, or individually by each contractor on a project.
What Contractors All Risks Insurance Covers
Contractors all risks (CAR) insurance is a combined policy covering the core risks on a construction project. It typically includes: contract works cover (the physical structure and materials under construction against fire, storm, flood, and accidental damage); third-party liability (injury to members of the public and property damage to third parties); and plant and equipment cover. Some CAR policies also include employers liability, professional indemnity, and JCT contract requirements.
Contract Works Cover
Contract works cover protects the physical works in progress - the partially completed building, installed materials, and temporary works - against loss or damage during the construction period. If a fire destroys part-completed works, or a flood damages foundations and groundworks, contract works cover pays for reinstatement. This is a risk that public liability does not cover - public liability only covers claims by third parties, not damage to your own works.
How CAR Differs from Public Liability
Public liability covers claims by third parties for injury or property damage. CAR insurance covers the contractor's own financial exposure on the project - damage to the works, loss of materials, and liability claims in a single product. The contract works section covers first-party loss; the third-party liability section covers claims by others. Both are needed on any significant construction project; some contractors hold a standalone public liability policy plus a separate contract works policy rather than a combined CAR.
Contract Requirements
Standard form construction contracts - JCT, NEC, and bespoke client contracts - routinely require contractors to hold CAR insurance or specific minimum levels of contract works and public liability cover. The insurance requirements are typically set out in the contract particulars. Failure to hold the required cover is a breach of contract and can result in termination. Confirm the insurance requirements in the contract before commencing works.
Disclaimer
This guide is for general information only and does not constitute financial or insurance advice. Kaeltripton.com is not regulated by the FCA. Always read policy documents in full before purchasing cover.
Frequently Asked Questions
Who arranges CAR insurance on a project - contractor or client?
This depends on the contract terms. Under some standard forms, the employer (client) arranges CAR insurance covering all contractors on the project. Under others, the main contractor arranges a project-wide CAR policy. In some procurement routes, each contractor arranges their own CAR independently. The contract particulars will specify who is responsible for arranging insurance and who is covered under it.
How long does a CAR policy run?
CAR policies are project-specific and run for the duration of the construction period, from the start of works to practical completion. The policy can be extended if the project overruns. After practical completion, the works become the client's property and responsibility; the building should then be insured under a standard property policy.
