Construction All Risk Insurance

The cover starts the moment the first batch of material is unloaded at the site. It stays active through the entire construction phase and only expires once the project is officially handed over to the principal or the policy period ends whichever happens first.

In India, CAR must include AOG covers like Earthquakes, Floods, Cyclones, and Landslides. Given that many Indian states are in high-seismic zones or prone to heavy monsoons, these are “Major Perils” and are never ignored.

Yes, under Section II. If a passerby is injured by a falling brick or if a neighboring building develops cracks due to your excavation, the policy covers the legal compensation and defense costs. Note: It does not cover your own workers; they need a separate Workmen’s Compensation policy.

Most Indian contracts have a “Defects Liability Period” of 12–24 months after completion. This add-on ensures that if you cause damage while returning to the site to fix a minor defect later, the insurance still covers it.

Standard CAR policies exclude the cost of fixing a “Faulty Design.” However, if a faulty design causes a part of the building to collapse and damage other correctly built parts, the resulting damage is usually covered.

Construction in India can take years. If the cost of cement or steel goes up by 20% during the project, your original sum insured might be too low. The Escalation Clause allows the sum insured to automatically increase (usually up to 25% or 50%) to match rising material costs.

Yes, but you must declare them. Temporary structures like labor huts, site offices, shuttering material, and scaffolding are covered under the “Material Damage” section if their value is included in the policy schedule.

The policy has a “Cessation of Work” exclusion. If work stops for more than a month (due to a legal stay or labor strike), you must inform the insurer. If you don’t, the policy may become void until work resumes and the insurer agrees to continue the cover.