If you are a contractor, you probahttps://images.unsplash.com/photo-1543525324-9146d43c2a4e?ixlib=rb-1.2.1&ixid=eyJhcHBfaWQiOjEyMDd9&auto=format&fit=crop&w=500&q=60bly know that there are myriads of risks that come with the job. Whether it’s an accident caused by accident or due to negligence, you need to be prepared for any eventuality in terms of accidents.
But how can you secure yourself and your workers? Well, the best way is to insure your company, including your workers against any accidents.
Even so, choosing the right construction insurance for your construction company plays an integral role. However, with different insurance terminologies thrown around, it can be utterly difficult to understand what they actually mean and what each cover offers.
One such insurance is the contractors all risk insurance, also known as contact works.
So what is the all-risk insurance coverage? What does it entail? And what does it offer to your company?
This article will delve into the background of what this insurance coverage is all about and hopefully explain how you can use it to protect your business.
What Is Contractors’ All Risks (CAR) Insurance?
Unlike many other insurance covers, all risk insurance coverage is a nonstandard insurance policy that offers insurance coverage on two major fronts.
The first coverage is against any form of damage to your property. The other form of coverage is for third party injury which involves the two major types of risks on any construction project.
When it comes to damages to property, this insurance covers all forms of damages to your property, including any form of improper construction of your structures, damages occurring during renovations, and any other damages that occur on a construction site.
Additionally, this insurance covers other third parties, including subcontractors that are working on your construction site. Not only does this insurance cover any associated risks, but it also aims at bridging the two types of risks into a common policy aimed at collaborating any exclusions that may otherwise occur in the case of two separate policies.
More often, all risk coverage is used commonly in construction sites such as buildings, water projects, flyovers, road construction, sewage treatment plants, among many others.
Understanding Contractors’ All Risks (CAR) Insurance
In the traditional sense, both you as the employer and your contractor are mandated to jointly take CAR insurance policy. At the same time, other parties such as financing companies can opt to be named into the insurance policy jointly.
Since different parties are jointly included in the policy, all have the right to claim for any benefits from the insurer against any claims that can be covered by the coverage.
Even so, all the parties involved in the policy have a duty to independently inform the insurer in case of any damages or accidents that may possibly lead to a claim of insurance.
Basically, CAR insurance is aimed at ensuring that all involved parties are comprehensively covered on any running project. This is regardless of the type of injury or damage impacted on an individual or a property.
The good thing about this policy is that any insurer who fails to honor the claims brought forth lose their right to any form of subjugation.
Basically, this means that once the insurer pays off any claims to any involved party, it cannot ask for any form of a refund from that party as long as it is involved in the contract.
Take for example you employ a contractor to work on a large building project. Since you’ve taken the CAR insurance, you can then rest assured that your contractor is also covered.
Since this is the case, you can make claims to the insurer for any damages done by your contractor. However, the insurer cannot reclaim the insurance claim from your contractor.
Events not covered by the CAR insurance policy
Although the CAR insurance policy is utterly extensive, there are certain events not covered by the policy. They include:
-Damages or loss caused by any willful misconduct
-Any form of damages or loss caused by a faulty design
-Any partial or total cessation of the work on site.
-Any other event agreed upon in the policy that is not deductible.
How is the sum insured determined?
There are different factors that come into play when it comes to determining the sum insured in a policy. They include the actual nature of the project, the actual sum insured for the event, the duration of the project as well as any voluntary additions that are included by the holder of the policy.
In terms of the duration of tenure of the project and policy, it’s important to note that a vast majority of insurers offer premium installment, as long as the policy is set to last for more than one year.