Contractors All Risk Insurance

Coverage Add-On Cover Exclusion


Every Project under development need complete protection against potential loss. Projects under development are exposed to host of risks which can put a break in operation, cause financial burden and leave you feeling you have no control. A construction site is susceptible to all sorts of Accidents. Losses can mount from pilferage, theft, damage, legal claims and more.

Contractor’s All Risk Insurance policy covers the risks during construction, comprehensively. It includes physical loss or damage to property, plant, machinery and tools, works brought on to the site and temporary works erected on-site, as well as third party Liability related to work conducted on the site.

This policy provides comprehensive insurance cover for civil engineering projects where the value of civil works is more than 50% of the total contract value such as: Residential, Commercial building, airport terminal building, Dams, River & Road bridges and flyover, Rail Ways, Tunnels, Special Structures and factory building.

In laymen term, Contractor’s All Risk Insurance policy is also called Construction All Risk Insurance. After the introduction of RERA Act 2016, it has become mandatory for any principal or contractor to have this insurance before the start of project under section 16.


Section I - It provides coverage for the property lost, damaged or destroyed by any cause, other than those specifically excluded in the Policy, necessitating replacement or repair. The Policy will pay or make good all such loss or damage up to an amount not exceeding the sum specified in respect of each of the items and not exceeding in the whole the Total Sum Insured.

Section II - Provides coverage towards: a) Legal liability for accidental loss or damage caused to property of other persons. b) Legal liability for fatal or non-fatal injury to any persons other than the Insured's own employees or workmen or employees of the owner of the works or premises due to construction of any property.

Add-On Cover

On payment of additional premium, the following coverage may be selected:

  • Provision for escalation
  • Clearance And Removal Of Debris
  • Additional Rate For Express Freight (Air Freight Excluded) Holiday And Overtime Rates Of the Wages
  • Additional Rate For Air Freight Only
  • Additional Custom Duty
  • Construction Machinery Plants And Equipments
  • Loss Due To Breakage Of Glass
  • Storage Rate At Fabricators Premises/Workshop
  • Maintenance Visits and Extended Maintenance Cover


The company will not be liable under the policy in respect of loss or damage due to:

  • Excess as stated in the Policy Schedule
  • Loss discovered only at the time of taking an inventory.
  • Normal wear and tear, gradual deterioration due to atmospheric conditions .
  • Loss or damage due to faulty design, workmanship.
  • The cost of replacement, repair or rectification of defective material
  • The cost necessary for rectification or correction of any error during construction
  • Loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, notes, securities, cheques etc.
  • Any damage or penalties on account of the Insured's non-fulfilment of the terms of delivery or completion under his Contract of construction or of any obligations assumed there under or lack of performance
  • Loss or damage to vehicles licensed for general road use or water borne vessels etc

Liability consequent upon:

  • Bodily injury to or illness of employees or workmen of the Contractor(s) or the Principal(s) or any other firm connected with the project
  • Loss of or damage to property belonging to or held in care custody or control of the Contractor(s), the Principal(s) or any other firm connected with the project
  • Any accident caused by vehicles licensed for general road use or by waterborne vessels or aircraft
  • Any agreement by the Insured to pay any sum by way of indemnity