Contractors’ All Risks (CAR) insurance is one of the most important types of construction insurance. Whether you’re a sole trader builder or a large contractor managing multi-million-pound developments, this CAR insurance protects your projects, materials, and liabilities from unexpected risks that could damage your business.
As one of the UK’s leading construction insurance brokers, we’ve put together this contractors’ all risks insurance guide. In it, we’ll explain what C.A.R. insurance is, who needs it, what it covers (and what it doesn’t), how to reduce premiums, and answer the most common frequently asked questions.
We hope it will prove useful. If you’d like some help or an insurance quote, then please get in touch. You can call us on 01482 434343, request a callback, or get a contractor’s all-risks insurance quote.
What Is Contractors’ All Risks Insurance?
Contractors’ all risks insurance (C.A.R. insurance) is a comprehensive policy designed for the construction industry. It combines multiple types of cover into one package, protecting firms against common risks, such as:
- Damage to works in progress
- Loss or theft of materials
- Third-party liability claims, including public liability insurance claims
Unlike standard business insurance, C.A.R. insurance is tailored to the risks associated with construction projects. This means it will offer cover for specific perils like:
- Incomplete structure/work in progress
- Exposed materials
- Hazardous working environments where the chances of loss or damage are higher
C.A.R. insurance typically includes:
- Contract works cover, which protects the building project itself
- Public liability insurance – which covers you against claims for injury or damage to third parties’ possessions
- Employers’ liability insurance – required by UK law if you have employees, it will cover the cost of compensation to employees if they are injured or have their property damaged through their work
- Plant and hired-in plant insurance – which insures construction vehicles and other plant equipment against loss or theft
Who Is Contractors’ All Risks Insurance For?
C.A.R. insurance is suitable for a wide range of professionals and businesses involved in construction and building work, including:
- Builders and general contractors
- Subcontractors and tradespeople, e.g. electricians, plumbers, carpenters, and builders
- Property developers
- Civil engineering firms
- Renovation and refurbishment specialists
- Groundworkers and demolition contractors
- Large construction firms
Even small-scale contractors benefit from C.A.R. insurance, as risks like theft, fire, vandalism, or accidental damage can occur on projects of any size.
What Does Contractors’ All Risks Insurance Cover?
C.A.R. is a flexible policy, and we can add or remove elements to suit your needs. Most people include:
- Contract Works
This is the core element of CAR insurance. It covers the construction project itself while it is in progress.
Covered risks typically include:
- Fire, flood, and storm damage
- Theft or vandalism
- Accidental damage to the structure
- Damage caused by third parties. For example, if a partially built extension is damaged in a storm, contract works cover would pay for repairs.
- Materials
C.A.R. insurance protects materials, whether they are:
- Stored on-site
- In temporary storage
- Being transported to the site
This is crucial given the rising cost of materials and increasing incidents of theft from construction sites. According to the CITB, 64% of construction professionals think theft is a bigger problem than five years ago, rising to 88% among experienced professionals. Driven by organised criminal gangs, this surge has resulted in an estimated £800m-£1bn annual cost to the industry.
- Public Liability
Public liability insurance covers claims made by third parties for injury or property damage caused by your work.
- Employers’ Liability
If you employ staff, this cover is legally required in the UK. Regardless of whether they are full-time, part-time or even volunteers, you must have at least £5 million of cover in place. It protects you if an employee is injured or becomes ill due to their work.
What Is NOT Covered By C.A.R Insurance?
While contractors’ all risks insurance is comprehensive, it doesn’t cover everything. Common exclusions include:
- Wear and tear – gradual deterioration of materials or equipment
- Faulty workmanship or design – although resulting damage may sometimes be covered
- Mechanical or electrical breakdown – though this can be added
- Intentional or malicious damage or negligence
- War or terrorism risks – these are usually excluded, though again, they can be added
- Existing structures – unless specifically included in the policy
How Much Does Contractors’ All Risks Insurance Cost?
At Coversure, we’ll create a policy around your needs, but your C.A.R. insurance quote will be based on things like:
- The size and value of the projects you’re working on
- The type of work undertaken – motorway work will mean higher premiums than domestic work, for example
- Your claims history
- If you have any employees
- The levels of cover required
- The security measures in place
- How well-trained is your workforce
- If you need to cover plant equipment
Small contractors might pay a few hundred pounds annually, while larger firms could pay significantly more depending on their risk exposure.
How To Save Money on Contractors’ All Risks Insurance
There are some simple ways to get cheaper insurance, including:
- Choose the right level of cover – asking your broker to review your cover can save cash by eliminating elements you don’t need
- Improve site security – insurers favour businesses that reduce risks, especially now. So, consider:
- CCTV
- Secure fencing
- Locked storage for tools and materials
- Storing equipment and tools off-site at weekends
- Raise your excess – raising your excess can reduce premiums by up to 10%
- Pay annually – that way you’ll avoid interest payments
- Avoid making claims – a low claims history demonstrates lower risk to insurers and can lead to lower quotes. Equally regular claims will send premiums soaring
- Bundle policies – many insurers offer discounts if you combine C.A.R. insurance with other policies, such as fleet insurance and construction insurance
- Work with a specialist broker – the easiest way to get cheaper C.A.R insurance is to speak to a specialist independent insurance broker, such as us. We can advise you on what you need before shopping around for you. If you’d like some help or an insurance quote, then please get in touch. You can call us on 01482 434343, request a callback, or get a contractors’ all-risks insurance quote.
Contractors’ All Risks Insurance Frequently Asked Questions
- Is contractors’ all risks insurance a legal requirement?
No, C.A.R. insurance isn’t mandatory. However, employers’ liability insurance is legally required if you have employees. - Does C.A.R. insurance cover subcontractors?
It depends on the policy. Some insurers include them automatically; others require them to have their own insurance. - Does it cover tools stolen from a van?
Not always. You may need a specific extension for tools in transit or overnight vehicle cover.4. Can I get cover for a single project?Yes, many insurers offer project-specific CAR policies for one-off developments. - Can I get C.A.R. for a private project, such as a home extension or new build?
Yes - Does it cover existing structures during renovations?
Usually not as standard. You may need to add “existing structures” cover if working on extensions or refurbishments. - Does it provide cover if a project is delayed?
Yes, C.A.R. insurance can sometimes be extended to cover delays, but standard policies focus on physical damage rather than financial loss due to delays. - Is faulty workmanship covered?
No, faulty work itself is usually excluded, but any resulting damage may be covered depending on the policy wording. - How quickly can I get cover?
In most cases, cover can be arranged the same day, especially for standard risks. - Do I need CAR insurance as a sole trader?
Yes, even sole traders face risks such as theft, damage, and liability claims. CAR insurance offers essential protection regardless of business size. - What level of public liability cover do I need?
Most contractors choose between £1 million and £10 million, depending on contract requirements and project size. Cover for £10m can be arranged by us through specialist insurers. - How can I get a contractors’ all-risks insurance quote?
Getting a quote is easy. You can call us on 01482 434343, request a callback, or get a contactors’ all-risks insurance quote.
Final Thoughts
Contractors’ all risks insurance is a cornerstone of financial protection in the construction industry. It safeguards your projects, your people, and your reputation against a wide range of risks that can arise unexpectedly.
Without it, a single incident, such as a fire, theft, or injury claim, could result in significant financial loss or even business failure. With the right policy in place, you can operate with confidence, knowing your work is protected from start to finish.
Andy
About The Author
Andy Price is the founder and Managing Director of Coversure Online, Coversure Hull, Coversure North Lincs and Coversure Peterborough. Andy holds the Diploma in Insurance (Dip. CII) from the Chartered Institute of Insurance and has over twenty years of commercial insurance experience.
