Construction projects are expensive. A single building project can cost crores of rupees. From the day work begins to the day it is handed over, the project faces many risks. Heavy rains can flood the site. A wall can collapse during construction. Equipment can damage finished work. A visitor can get injured.
Contractors all risk insurance, also called CAR insurance, covers all of these risks under one policy. It protects the project itself, the materials on site, and third parties who may be affected. Without it, a single incident can cause financial losses that wipe out the project's profit margin.
Protect your construction project with customized CAR policy terms
CAR insurance is a project based policy that covers physical damage to a construction project during the construction period. It protects the work in progress, materials stored on site, temporary structures, and construction equipment. It also covers your legal liability if a third party is injured or their property is damaged because of the project.
The policy starts when construction begins and ends when the project is handed over to the owner. Many policies also include a maintenance period of 3 to 12 months after completion.
Contractual Requirement: On many projects, the client or lender requires the contractor to have CAR insurance before work can begin. It is often an indispensable condition of the construction contract.
Contractors All Risk insurance provides comprehensive multi-peril indemnity for materials, structures, environment, and third-party interactions.
This is the core coverage. It protects the project against physical damage from any cause that is not specifically excluded. This includes damage from fire, explosion, storms, floods, earthquakes, landslides, theft, vandalism, human error, and construction accidents. If a newly built wall collapses or a finished floor is damaged by falling equipment, the insurer pays for repairs.
If a pedestrian is injured near the site, or if construction work damages a neighbour's property, the contractor is legally liable. Third party liability cover pays for medical costs, property repair, and legal defence. On projects in populated areas, this coverage is essential.
Construction sites are exposed to weather. Monsoon floods, cyclones, earthquakes, and landslides can destroy weeks or months of work. CAR insurance covers the cost of rebuilding after natural disasters. In regions like Odisha, which faces cyclone risk, this coverage is especially important.
After a major incident, the site may be full of debris that must be cleared before rebuilding can start. Debris removal can cost lakhs of rupees. This coverage pays for clearing the site so work can resume.
Construction work can damage nearby buildings, roads, or underground utilities. This coverage protects against claims from owners of surrounding property that is damaged by your project activities.
CAR insurance is essential for any entity undertaking civil construction work:
CAR premiums depend on the total project value, the type of construction (residential, commercial, industrial, infrastructure), the project location and its natural disaster risk, the construction period, the coverage extensions selected, and the contractor's claims history.
Premiums are usually a small percentage of the total project value, typically 0.1% to 0.5%. A Rs 10 crore project might pay Rs 1 to 5 lakh per year in premium. These are approximate ranges.
If your project involves building a structure, you need CAR. If your project involves installing machinery or equipment, you need EAR. Some complex turnkey projects need both.
Installing plant equipment, manufacturing assembly lines, or turbines? Explore our specialized Erection All Risk Insurance or consult on umbrella Corporate Insurance.
Specialized construction, infrastructure, and engineering insurance advisory
We understand construction risk. Our IRDAI licensed advisors have been helping contractors and developers insure their projects for over 5 years. We compare policies from multiple insurers and recommend coverage that matches your project type, value, and risk profile. We also support you through the claims process when incidents occur on site.
Answers regarding covered perils, buyer responsibilities, natural calamities, premium rates, and maintenance periods
Protect your construction project. Fill out the form or call 90 90 92 15 15 for a free CAR insurance quote based on your project value and type.
Disclaimer: Coverage based on project type, value, and duration. Exclusions include defective design, wear and tear, and consequential losses unless specifically covered.