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7/31/2019 CAR Policy Explained
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7/31/2019 CAR Policy Explained
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Part I Basic Policy Form
Part II Standstill Insurance
7/31/2019 CAR Policy Explained
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CAR Vs EAR
EAR- Erection All Risk
Determining factor- Value of Erection &Installation works
Less than 50% - CARAbove 50% - EAR
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SUBJECT MATTER INSURED
CAR may be taken out for all buildingand civil engineering projects, such as:
Residential and office buildings, hospitals,schools, theatres
Production facilities
Infrastructure facilities, airports
Bridges, dams, tunnels and harbors (wetworks)
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INSURED PARTIES - Jointly
CAR insurance should be concluded for allparties concerned to avoid overlaps or gaps incover:
The principal (employer) &/or
The main contractor &/or
Subcontractors &/or*
Project managers &/or Suppliers, if any*.
* Un-named
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SCOPE OF COVER Two Sections
SECTION 1- Material Damage to: Contract works (permanent and temporary works
forming part of the contract)
Removable of debris Professional Fees Free issue materials
Construction Equipment ( Site offices, storagesheds, silos, scaffolding, utilities etc)
Construction machinery (earthmoving equipment,cranes, site vehicles)
Principals existing property
SECTION 2 - Third party liability: Bodily injury & Property Damage
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SECTION 1- Material Damage
Cover on ALL RISK basis againstunforeseen and sudden physical loss ordamageto the insured property from ANY
cause other than those specificallyexcluded
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SECTION 2
Where the Insured becomes legally liabletopay as damages consequent upon :
Accidental bodily injury to third parties
Accidental loss or damages to propertyowned by third party.
Occurring in direct connection with construction works insured underSection 1
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SCOPE OF COVER - Cont
General Exclusions:
Political risks, war or warlike operations,SRCC
Nuclear, radioactive contamination
Willful act or willful negligence of theinsured or their representatives
Cessation of work whether total or partial
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SCOPE OF COVER - Cont
Special Exclusions to section I:
Consequential loss of any kind
Faulty design Defective material / workmanship (faulty part only)
Mechanical and/or electrical breakdown
Wear and tear, corrosion, gradual deterioration
Road vehicles, waterborne vessels and air crafts
Inventory losses
7/31/2019 CAR Policy Explained
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SCOPE OF COVER - Cont
Special Exclusions to section II:
Property insured or insurable under Section I
Vibration, removal, weakening of support Liability for bodily injury to employee/ workmen of
insured parties
Liability for damage to property belonging to insured
parties Motor , Marine & Aviation liability
Contractual liability
7/31/2019 CAR Policy Explained
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PERIOD OF COVER
Contractors All Risks Insurance
Works cover Maintenanceperiod
Operational covers (Fire, Alliedperils, TPL)
Inception date
Commencement of works
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PERIOD OF COVER
Cover ATTACHES from
the commencement of work or
after the insured items have been unloaded at site or
the inception date as specified in the policy
Whichever is later
And TERMINATES when
the completed structure is taken over or
put into service or the expiry date specified in the policy
Whichever is earlier
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CALCULATION OF SUM INSURED
SI must be equal to the amount stated in the building contractplus a value of any free issue material
Contractually, insured contractor may be required (e.g. Under
FIDIC contracts) to include 15% of CV towards costs ofrectification, removal of debris and professional fees
Separate sums insured for:
Construction machinery and construction plant and equipment(equal to NRV)
Existing property and clearance of debris (Loss limits) Third party liability Section II (as per contact conditions)
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PRINCIPLE EXTENSIONS TO BASIC CARCOVER
Section I:
Strike, Riot and Civil Commotion
Maintenance Visits Vs Extended maintenance Expediting Expenses
Airfreight expenses
Offsite Storage
Inland Transit
Designers Risk
Contracts works taken over or put into service
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PRINCIPLE EXTENSIONS TO BASIC CARCOVER
Section II:
Cross Liability
TPL cover during maintenance period Vibration, removal or weakening of support
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PART 2