prabhuIf, for instance, a construction site is raided by thieves during the night or it’s been vandalised, having an insurance policy in place can help to cover the costs of any replacements or repairs.
What type of insurance is this, though? The answer is contractors’ all risk insurance.
Find out what it is and who needs it by continuing to read our helpful guide.
What is contractors all risk insurance in the UK?
Contractors’ all risk insurance is a type of insurance policy that covers accidental loss or damage to a property insured during the construction period. This covers contract works undertaken by the contractor and any subcontractors.
If a construction project is destroyed by fire or flood that neither the customer nor contractor was responsible for, contractors’ all risk insurance can pay for the repairs. Thanks to the insurance policy, the contractor and customer won’t be left out of pocket.
Standard insurance policies will usually cover ‘named perils’, such as specific situations outlined in the policy documents. But, contractors all risk insurance is much more flexible, offering cover for all types of liabilities (unless otherwise stated).
Who needs contractors all risk insurance?
Contractors’ all risk insurance policies are jointly taken out by a few parties involved in the construction project.
Usually, the contractor and employer will take out the policy, but other parties – including a finance company – can also be named. Every party named on the insurance policy can file a claim, and they’re all covered without any consideration for the type of damage.
This particular type of insurance policy can be extended to cover subcontractors, contractors, suppliers and manufacturers.
What does contractors all risk insurance cover?
Contractors all risk insurance covers a lot during a construction project.
It should cover all equipment, materials and any employees on-site for the duration of the project. The insurance policy also covers the building – at whatever stage it’s at – as well as any temporary buildings set up on site. These can include portable offices, break rooms and toilet units.
While it is possible to obtain separate insurance policies to cover different areas – such as contract works insurance to cover tools and materials and public liability insurance for third-party damage – it’s better to roll these into one with a contractors’ all risk insurance policy.
A contractors’ all risk insurance policy covers:
- Contract works
- Public liability
- Employers’ liability
- Own plant or hired-in plant
- Privately owned tools
Is there anything excluded from a contractors’ all risk insurance policy?
The contractors’ all risk insurance policy is a useful type of cover that offers plenty of protection for a construction project. However, it doesn’t cover everything.
Here is what is not covered by contractors’ all risk insurance:
- Professional indemnity – poor design or building works
- D&O – directors and officers whose decisions have a poor outcome
- Poor workmanship – must be covered by a structural warranty
- Wear and tear – contractors’ all risk insurance doesn’t cover general equipment failure
- Consequential losses – due to delays, penalty charges, poor performance, liquidation, etc.
- International projects – overseas projects are, usually, not covered
Obtain a contractors’ all risk insurance policy
Interested in acquiring a contractors’ all risk insurance policy for your project? Email info@architectscertificate.co.uk today.
