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Comprehensive Contractors All Risks Insurance Explained

03/July/2024
Construction work

What is Contractors’ All Risks Insurance?

Builder collecting equipment from his van, equipment covered by construction insurance

Contractor All Risks Insurance, also known as Construction Works Insurance, is a crucial policy for any construction contractor or developer. Its unique features, which we at Primo Insurance are here to clarify, make it a standout choice. In essence, Contractors All Risks Insurance offers protection against the loss of or damage to a construction project or site.

This can include damage to the building or extension under construction and the project works too. Furthermore, it can cover plant, materials, and machinery on-site for construction purposes. This type of insurance is highly recommended to enhance your standard Public Liability or Employers Liability Policy for anyone overseeing a construction project.

What Does Contractors All Risks Insurance Cover?

The policy covers loss or damage to:

  • The contract works under construction, including partially completed buildings, temporary buildings, or materials used in construction.
  • The insured-owned construction plant, tools, machinery, and equipment.
  • The insured-hired construction plant, tools, machinery, and equipment.
  • Tools and personal effects on-site belonging to employees.

Contractors All Risks Cover Summary

Contractors All Risks Insurance offers comprehensive cover for all construction projects, including new builds, extensions, refurbishments, renovations, retrofitting, alterations, and repair work. This extensive cover protects you from various potential risks, providing you with reassurance and security. Indemnity limits should cover the value of the contract works, plus any existing structures if you are required to insure these. Coverage is available for owned plant and machinery or for that plant you might hire-in. Finally, coverage is also available for employees' tools and personal effects.

With Contractors All Risks Insurance, you get immediate coverage, ensuring your project is protected. This immediate coverage provides peace of mind, knowing that your project is safeguarded from the start. Plus, we offer flexible payment options, allowing you to choose between monthly or annual payments. This flexibility is designed to accommodate your financial needs and make the insurance process as easy as possible for you. Available as an add-on to Primo's Public and Employers Liability Policy, our solutions are designed to suit your needs.

Example of Contractors All Risks Insurance

Michael is a self-employed building contractor hired to build an extension on Sara's house. While one of Michael's subcontractors is working on the site, his mini-digger accidentally knocks down a piece of hoarding, breaking several glass panels and damaging part of the existing structure. This delays (we do not cover delays) the project by a week and incurs additional costs for rebuilding and replacement materials.

Fortunately, Michael had taken out Contractors All Risks Insurance with Primo. He contacts Primo to claim the cost of the partially completed build, the glass panels, and the lost labour costs. The process of making a claim is straightforward, and thanks to Primo arranging Contractors All Risks Insurance, Michael's firm doesn't suffer financially due to this mishap, providing him with immediate financial protection. Sara is also satisfied with the resolution.

Potential Claims

Information from the HSE

Examples of scenarios covered under a contractor all risk insurance policy:

  • An electrical fault causes a fire at night, destroying a partially completed extension. The policy covers demolition and rebuilding costs.
  • An arsonist fires roofing materials on-site, damaging a hired cherry picker. The policy covers replacement costs.
  • A minor explosion due to an unsafe gas pipe damages existing and new works. The policy covers repair and rebuild costs.
  • Heavy rainfall renders some building materials unusable. The policy covers replacement costs.
  • Theft of tools and personal effects from the job site. The policy covers replacement costs for the employee's items.

What Exclusions Apply to the Policy?

Exclusions and restrictions apply as with any insurance policy. It's recommended to read the full policy terms before purchasing. Key exclusions include:

  • Existing structures or property being worked on (unless agreed otherwise).
  • Wilful acts or negligence.
  • Asbestos contamination.
  • Relief of responsibility under contract terms.
  • Mechanically propelled vehicles, unless primarily tools of trade.
  • Theft from unattended cars unless secured.

Payment Terms

Primo offers full payment for 12 months or monthly rolling payments WITH additional fees, allowing you to choose the most convenient option.


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    Contractors All Risks Insurance FAQs: Expert Answers to Your Queries

    Navigating the complexities of insurance can be daunting, especially for those in the construction industry where risks are inherent. To help you better understand Contractors All Risks Insurance, we've compiled a comprehensive list of frequently asked questions.
    Whether you're a seasoned contractor or new to the field, these insights will equip you with the knowledge necessary to protect your projects and ensure peace of mind. Read on to discover expert answers to the most common queries about Contractors All Risks Insurance.
    Does Contractors All Risks Insurance Cover Theft, Fire, Flood, or Vandalism? - (click to expand)

    Yes, the policy covers the following:

    • Theft of construction plants, tools, machinery, and equipment.
    • Flood damage to the construction plant, tools, machinery, equipment, and partially completed works.
    • Fire damage to materials, tools, machinery, equipment, or partially completed works.
    • Losses due to incidents like fire, flood, theft, vandalism, or damage.
    What Projects Does Contractors All Risks Insurance Cover? - (click to expand)

    Contractors All Risks Insurance covers a range of projects, including:

    • Extensions: Projects usually take around four months to complete and are vulnerable to various risks.
    • Refurbishments: Covers cosmetic and significant renovation work.
    • Repairs: Essential for structural and building repairs, covering tools, materials, and machinery on-site.
    • New builds: Covers the entire job site from start to completion.

    Contractors All Risks Insurance Arranged by Primo Covers Projects for:

    • Domestic: Private customer's home or premises.
    • Commercial: Business or municipal premises such as schools, offices, retail, or leisure facilities.
    Do Builders Need Builders All Risk Insurance? - (click to expand)

    Without it, rebuilding or replacing costly materials and machinery could financially devastate your business. Contractors All Risks Insurance protects against significant losses from fire, flood, theft, vandalism, or weather damage. This type of insurance is essential for maintaining financial stability.

    What Does Contractors All Risks Insurance Not Cover? - (click to expand)

    Professional indemnity: Separate insurance for financial loss due to professional advice or designs.

    Cyber insurance: Separate policy for financial loss from data breaches, hacks, or digital fraud.

    Additional Policies Needed

    As a self-employed builder, contractor, or developer, having a comprehensive suite of trade insurance policies is essential for safeguarding against potential issues during and outside work. These two policies are critical alongside Contractors All Risks Insurance and can be easily added with Primo:

    • Public Liability Insurance: This critical cover protects against the financial consequences of accidents, injuries, or property damage during business activities. It's essential in the high-risk construction industry. Contractor public liability insurance is vital for ensuring you're covered for any mishaps.
    • Employers' Liability Insurance: EL covers claims against your business for sickness, injury, or property damage caused to someone working for you. It's a legal requirement in the UK if you employ anyone. This is a crucial part of contractors insurance UK.
    What Should I Do If I Need to Make a Claim? - (click to expand)

    If you need to make a claim, contact your insurance provider as soon as possible. Provide them with all necessary details, including the nature of the incident, the extent of the damage or loss, and any supporting documentation such as photographs, receipts, or witness statements. Your provider will guide you through the claims process and inform you of any further steps required. It's crucial to maintain accurate records and document everything related to the incident to ensure a smooth and efficient claims process.

    Is Contractors All Risks Insurance Mandatory in the UK? - (click to expand)

    While Contractors All Risks Insurance is not legally mandatory in the UK, it is highly recommended for anyone involved in construction projects. It provides comprehensive coverage against a range of risks that could otherwise result in significant financial losses. Additionally, some contracts or clients may require proof of such insurance before work can commence, as it demonstrates professionalism and a commitment to managing risks effectively. Having this insurance can also give you a competitive edge in securing contracts.

    Can Contractors All Risks Insurance Be Extended to Cover Multiple Projects? - (click to expand)

    Yes, Contractors All Risks Insurance can be tailored to cover multiple projects under a single policy. This is particularly useful for contractors who handle several projects simultaneously. By consolidating coverage, you can simplify the management of your insurance and ensure continuous protection across all your worksites. It's important to discuss your specific needs with your insurance provider to arrange for appropriate coverage limits and terms that reflect the scope and scale of all ongoing projects.

    What Factors Affect the Cost of Contractors All Risks Insurance? - (click to expand)

    Several factors influence the cost of Contractors All Risks Insurance, including:

    • Project Value: Higher value projects generally have higher premiums due to the increased risk of substantial losses.
    • Type of Work: The nature of the construction work, such as renovations, new builds, or high-risk projects, can impact the cost.
    • Location: The geographical location of the project site, including local crime rates and environmental risks, plays a role.
    • Security Measures: Enhanced security protocols on-site, such as surveillance systems and secure storage, can reduce premiums.
    • Claims History: Contractors with a history of frequent claims may face higher premiums due to perceived higher risk.

    It's advisable to work with an insurance broker to get tailored quotes and explore ways to mitigate risks, which can help manage premium costs effectively.

    How Can I Reduce My Contractors All Risks Insurance Premiums? - (click to expand)

    To reduce your Contractors All Risks Insurance premiums, consider implementing robust risk management strategies. This includes maintaining a safe and secure worksite, using high-quality materials, and adhering to all relevant safety regulations. Additionally, maintaining a good claims history can positively impact your premium rates. Here are some specific actions you can take:

    • Enhanced Security: Install surveillance cameras, secure fencing, and alarm systems to deter theft and vandalism.
    • Regular Training: Provide regular safety training for your employees to reduce the risk of accidents and injuries.
    • Site Management: Keep the construction site tidy and well-organised to prevent hazards and ensure efficient operations.
    • Quality Control: Use high-quality materials and follow best practices to minimise the risk of defects and damage.
    • Insurance Review: Regularly review your insurance coverage with a broker to ensure you're getting the best rates and adjust policies as needed.

    By proactively managing risks and demonstrating a commitment to safety, you can potentially lower your insurance premiums over time.

    While we strive to keep our website and resources up-to-date with the latest information and regulations in the UK insurance market, nothing can replace the expertise of a seasoned broker. Our experienced team at Primo is dedicated to understanding your individual needs and finding the most suitable cover for your unique circumstances. Don't hesitate to contact us for tailored advice and a no-obligation quote.

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