Contractors’ All Risks Insurance

What contractors’ all risks (CAR) insurance is

Contractors’ all risks (CAR) insurance protects a construction or renovation project against accidental loss or damage while the work is under way, and usually includes liability to third parties for injury or property damage arising from the works. Liberty describes its contractors/erection all risks cover as protection for project works against accidental loss or damage, including third-party risk, subject to policy terms, conditions and exclusions (see Liberty’s page).

What is usually insured

• The contract works: the building, fit-out or renovation work you are carrying out.
• Materials on site that are part of the project.
• Third-party liability for injury or property damage connected with the works, as set out in the policy.

Plant and equipment, the maintenance or defects period and any extensions depend on the policy, so tell us what the contract requires. Policy exclusions apply, and cover depends on the wording.

CAR vs public liability vs WIC insurance

These three covers do different jobs and are often asked for together:

• CAR insures the project works and materials, plus third-party liability for that project.
• Public liability covers your legal liability to third parties from your business activities, not tied to a single project.
• Work injury compensation insurance covers your employees’ work injuries. MOM requires each employer to buy its own policy, and project insurance does not replace it.

Why contractors are asked for CAR

CAR is not a general legal requirement in Singapore, but a main contract, client or tender document will often specify it, along with the sum insured, the period and who must be named on the policy. Read the insurance clause before you quote for the job, and send it to us so Liberty can match the wording. If you are a sub-contractor, check whether the main contractor already insures the works and what they expect from you.

Common mistakes to avoid

Under-stating the contract sum. The sum insured should reflect the full value of the works, including materials supplied by the client where the contract says so. If it is too low, a claim may be reduced.

Leaving it late. Cover is not in place until Liberty issues the policy, so arrange the quotation before the first day on site, not after.

Forgetting the people. CAR looks after the works and third parties. Your workers still need their own WIC policy, and your vehicles need motor insurance.

What to prepare for a quote

• Company name and UEN, and your trade
• Project description and site address
• Contract value (the sum to be insured) and the project period
• The insurance clause in the contract, including limits and parties to be named
• Annual turnover, if you want ongoing cover across several jobs

Liberty issues the policy after a signed proposal and payment. Please allow time before the works start, because cover is not in place until the policy is issued.

Quotes are indicative and subject to Liberty Insurance’s terms, excess and exclusions. Cover starts only when Liberty issues the policy after a signed proposal and payment.