In the dynamic and demanding world of construction, risks are unavoidable. Unforeseen events, natural disasters, accidents, or third-party damage can seriously threaten the smooth progress or even the completion of a construction project.

Comprehensive Protection at Every Stage of a Construction Project

Every construction project, regardless of its size or complexity, involves risks that may affect costs, timelines, and ultimately its successful completion.

Natural hazards, accidents, material damage, or third-party claims can quickly turn into significant financial burdens if adequate insurance coverage is not in place.

Contractors All Risks Insurance (C.A.R.) is one of the most comprehensive and effective risk management solutions in the construction sector. It provides protection for both the project itself and all involved parties, from the commencement of works through to the project’s completion and handover.

What Is Contractors All Risks Insurance (C.A.R.)?

Contractors All Risks Insurance is an “all risks” policy designed to cover sudden and unforeseen loss or damage that may occur during construction works, except for risks expressly excluded under the policy terms and conditions.

What Is Covered Under the Construction Works

The insured project may include:

• Contractual works carried out by the main contractor and subcontractors
• Preliminary works such as excavation and ground levelling
• Materials supplied and stored on site by the project owner

It is essential that materials supplied by the employer are declared separately and their value is included in the policy schedule to ensure accurate and complete coverage.

Comprehensive Cover for the Project and All Involved Parties

Contractors All Risks Insurance provides multi-layered protection throughout the construction period, covering both the project itself and third-party liability exposures.

Regarding the works, the policy covers damage arising from sudden and unforeseen events or events beyond the insured’s control such as fire, explosion, earthquake, flood, storm, landslide or subsidence, structural collapse, as well as theft or burglary. This ensures that major losses do not disrupt financial planning or jeopardise project completion.

Proper calculation of the insured value is a key factor in effective risk coverage, ensuring adequate limits for construction works, machinery, and site equipment. Additional coverage for removal of debris, as well as property located near the construction site and belonging to the project owner or the insured, further enhances the completeness of the insurance protection.

At the same time, Contractors All Risks Insurance protects contractors against third-party liability claims arising during construction activities. Bodily injury or property damage to neighboring buildings or third-party property—such as falling materials or damage caused by construction works—can lead to significant financial and legal consequences. Third-party liability coverage ensures that such claims do not have to be met from the contractor’s own funds, safeguarding liquidity and business continuity.

Who Can Be Insured Under a C.A.R. Policy

The policy may include:

• The employer (project owner)
• The main contractor
• The engineer and/or architect
• Subcontractors

This ensures comprehensive protection for all parties involved in the construction project.

Maintenance Period Coverage

Contractors All Risks Insurance may be extended to cover the maintenance period, which begins upon project handover and typically lasts between six and twelve months. During this period, the policy covers damage to the works caused by the contractor while fulfilling maintenance obligations.

Why Contractors All Risks Insurance Is Essential

Contractors All Risks Insurance:

• Protects the construction project against serious and unforeseen damage
• Ensures compliance with contractual and financing requirements
• Protects contractors from third-party claims
• Limits financial exposure and supports liquidity
• Enables uninterrupted project continuation and completion

Conclusion

Contractors All Risks Insurance (C.A.R.) is not merely a standard insurance requirement or a contractual formality associated with construction projects. It is a fundamental mechanism for protection, stability, and business continuity—for both project owners and all professionals involved.

In an environment where technical challenges, natural risks, and legal liabilities are part of everyday operations, a properly structured Contractors All Risks Insurance policy acts as a safeguard against unforeseen events that could impact the cash flow or endanger the company’s reputation and long-term sustainability.

With appropriately designed coverage, Contractors All Risks Insurance ensures that construction projects can proceed safely from start to completion, even when unexpected losses or third-party claims arise. At the same time, it provides confidence, professional credibility, and allows all stakeholders to focus on what truly matters: the successful, timely, and high-quality delivery of the project.

Tonia Despoti

Product Development & Training Manager