Contractors All risks Policy

It is designed to cater to the needs of Civil Engineering Contractors for the works under construction. Policy may be taken by Contractor, Sub-contractor or the Principal or for the joint interest of all. All types of buildings including residential, commercial and civil engineering projects including Factories, Roads, airports, dams, tunnels, etc. can be insured.

Scope of Cover
It is an all risks policy subject to named Exclusions. Any sudden and unforeseen loss or damage occurring during the period of insurance to the property caused by Accidental external means, Fire & allied Perils, Acts of God (i.e. Flood, Storm, Tempest, Inundation, Earthquake and other convulsions of nature), impact, Theft, burglary, bad workmanship, lack of skill, negligence, malicious act Riot and Strike etc., are covered.
The policy comprises of 2 Sections:
1. Section I-Material Damage- Covering physical loss, damage or destruction of the property insured by any cause, other than those specifically excluded in the policy.
2. Section II-Third Party Liability- To cover the contractor against any legal liability arising out of bodily injury or property damage belonging to a third party.

Key Features:

Sum Insured:

Section I – Material Damage

Total Contract Price including the estimated cost of labour charges and cost of materials

Materials or items supplied by the Principal

Any additional items not included in (a) and (b) above

Section II – Third Party Liability (Optional)

The sum insured under section II should represent the per accident limit (the maximum legal liability that may fall on the insured as a result of an accident in the insured’s site). The limit per policy period should be fixed taking into account the maximum number of such accidents which can reasonably be expected to occur.

Premium: Facility for Payment of Premium in quarterly installments is available, provided the Period of Insurance is more than 12 months.

Premium refund benefit is available for:


Early completion of project

Period of Cover: Period of insurance should be equivalent to the period of contract, commencing from the date of unloading of the first batch of material at the site of construction and expiring on the date of handing over of the contract work to the principal.

In case of delay in completion of work, policy can be extended by paying additional Premium which depends upon the period of extension.


Removal of Debris



Design Defect Cover

Additional Customs Duty


Express freight, Overtime charges, Holiday wages etc.

Contractors' Plant & Machinery (upto 5% of CAR SI or Rs 25 lakhs whichever is lower)

Third Party Liability

Free Issue of Materials issued by Principal.

Maintenance Visit or Extended Maintenance


Faulty design

The exclusion of defective material / workmanship is limited to the parts of the structure immediately affected and does not apply to any consequential loss to correctly executed items, arising out of the accident due to defective material or workmanship.

Loss discovered only at the time of taking inventory.

Loss arising out of penalty for delay, non-fulfillment of terms of contract.
Consequential loss

Compulsory Excess – First amount of each & every loss to be borne by insured which varies according to the nature of claim, i.e Acts of God/Major Perils/ Collapse claims.

Basis of Claims Settlement

Repairable damages - cost of repairs necessary to restore the property to the original condition immediately before loss less salvage, Under Insurance and excess.

Total Loss - Actual value of the property immediately before loss less, salvage Under Insurance and excess.