Contractors All Risk Insurance covers you not only for your existing structure but also for the structure that is currently being worked on.
A standard Public Liability policy will only cover tradesman for damage caused to the third-party premises. Contractors All Risk Insurance will cover any damage caused to the building works, for example if there is an unexpected flood, storm, or fire, it will even cover for poor workmanship.
Additionally, if the insured only had a regular Public Liability policy and there was a fire, causing serious, if not fatal damage to the works, then the insured would not be covered and may even be forced into liquidation.
Yet, if the insured had taken out a Contractors All Risk policy, then they would have been covered, as mentioned in their contract works section.
Moreover, Contractors All Risk Insurance (in contrast to regular Public Liability Insurance) also includes cover for future claims made in reference to work previously carried out by the insured.
CLICK HERE TO GET A QUOTE FOR CONTRACTORS ALL RISK INSURANCE
Contractors All Risk Insurance (in short):
- A contract covering a period of 3 months (max)
- Cover for £100k (maximum contract price)
- Provides cover for bonafide sub contractors *
- Covers both Own Plant (£10k) and Hired in Plant works (£10k)
- Includes both Public Liability (£5 million) and Employers Liability (£10 million)
With insurers informing their clients that cover for a large building contract on their house is fundamentally dependent on their contractor having the correct Public Liability Insurance; Contractors All Risk Insurance is now more than ever a necessity in the construction industry.
So, if you are having large works carried out on your house or simply if you are a contractor carrying out large projects, a comprehensive Contractors All Risk Policy is what you will need. We cater for all trades all turnovers and all limits.
For a Contractors All Risk quote we will need the following details:
- Contract Period
- Contract Length
- Description of all activities carried out
- Level of Public Liability needed
- Turnover of contractor
*In the event of them not being able to produce their own cover.
Contractors All Risk Insurance – Case Studies
A common question we get asked is what is Contractors All Risk Insurance and what is included?
To break it down, CONTRACTORS ALL RISK ISNT THE ACTUAL COVER unlike public liability (damage to third party property) and employers’ liability (protecting your company against injury claims from employees), it is just a title that covers two different insurances. It can be a little bit complicated, but we’ve tried to explain it below.
What Contractors All risk covers is two sections:
Section 1: Contract works
The contract works cover gives you cover for the works/contract that you are working on and cover for the material on or off site stored in a secure location.
A couple of examples:
Example 1:
You are carrying out a new build development, the cost of the contract is £800k, (this would mean that if this were to be your largest contract of the year, this is the sum you would need to be insured for) the build was going along all ok until one evening there was a fire caused on your site. absolute nightmare as you were 600k into the project. Now you must think.
- Would your public Liability pay out?
- Would your contract works pay out (which is part of your contract works section). A
The answer is B, this would be a contract works claim.
Why would it not be A under your public liability? Well as Public liability covers damage to third party property, you have no cover here as you haven’t damaged any third-party property.
So, the claim would defer to your Contractors All Risk section of the policy under which you would have your contract works cover and this part of the policy would pick up the claim as it is covering your contract.
Example 2:
You are carrying out a double story extension for a client. This time the contract value is 250k and 3 months is there is storm / flood damage to the build and there is serious damage to the contract and the building, the building must be repaired, and the new works must be pulled down and started again.
Therefore, would this claim go under:
- Public Liability
- Contract Works
- The clients’ buildings Insurance
The answer is B and C, again you have caused no damage to the property so public liability won’t pay. The buildings insurance of the client would pay for any damage to existing structure caused by the storm but not for any damage caused by the works, and the contract works section of the builder’s policy will pay for the damage caused and forward funds to get the builder back to the stage they were at.
So, this is how contract works operates as a title under the contractors all risk section and not forgetting that the contract works also picks up any theft of material from site stored in a secure location.
Section 2: Plant Insurance
Plant insurance is another section of contractors all risk insurance. There are three types of plant cover.
- Own Plant
- Hired In Plant
- Hired Out Plant
Own Plant
Own plant insurance let’s remember is not tools, tools are handheld items and plant is heavy machinery. What insurers will want to know is total value of all plant and maximum value of any 1 item. To ensure you get paid out when plant is stolen the plant will need to have been stored in a secure location and not just left out in the open.
Hired In Plant
Hired in Plant insurance covers plant that you hire form a plant hire company. Sometimes you can pay the hirer as they offer you insurance, but often this works out very costly or you can have it added to your insurance policy.
For this to rate, insurers would need to know, what your annual hire charges are and the maximum value of any 1 item of plant. By obtaining these figures the underwriter can calculate what type of risk they are exposed to.
Hired Out Plant
Hire out plant insurance is general taken out by pant hire companies hiring out to third parties. This is a heightened risk as the plant once it leaves your site is out of your control and is exposed to theft and damage. Insurers in this instance to calculate would want to know how much plant is out on sites at any 1-time, total hire charges for the year and maximum value of any 1 item hired out.
So, there we have it, that is Contractors All Risk insurance explained, but as mentioned at the start, don’t get confused, Contractors All Risk is only a title and the real covers are what lie beneath which are the contract works and the plant cover and, in my eyes, all contractors should have at least contract works added to their policies to protect their builds, their companies and their clients.
