Construction is one of the most risk-heavy industries in the UK. Projects involve high-value materials, specialist plant, multiple contractors working side-by-side, tight deadlines, and constant exposure to weather, theft, fire, and accidental damage.
Contractors’ All Risks (CAR) insurance is designed to protect the financial stability of a project when something goes wrong. It typically covers damage to the contract works (the build itself), materials on site, and often temporary works. Many policies can also include public liability and employers’ liability, making CAR a practical “project backbone” policy.
If you’re a builder, principal contractor, developer, or subcontractor, understanding CAR insurance helps you avoid gaps that can lead to disputes, delays, and expensive out-of-pocket rebuild costs.
Contractors’ All Risks insurance is a specialist construction policy that covers physical loss or damage to the contract works during the period of construction.
In plain English: if the part-built works or materials are damaged by an insured event (for example fire, flood, storm, vandalism, or accidental damage), CAR can pay to repair or replace them.
CAR is often arranged:
On an annual basis (for contractors who run multiple projects)
On a single project basis (for one specific contract)
It’s commonly required by:
Main contractors and principal contractors
Property developers
Local authorities and housing associations
Commercial clients and funders
Some domestic clients (especially for high-value builds)
CAR policies vary by insurer, but most UK policies are built around a few core sections.
This is the heart of CAR insurance. It covers the permanent works in progress, including:
New build structures
Extensions and renovations
Fit-out works
Structural alterations
Partially completed works
Cover is usually provided on a “contract value” basis, which should reflect:
Labour and materials
Professional fees (if included)
Subcontractor costs
A contingency for variations (often 10–20%)
CAR often covers materials intended for incorporation into the works, including:
Materials stored on site
Items in secure containers
Sometimes materials in transit (if added)
Theft is a common claim driver here, so insurers may require:
Secure perimeter fencing
Locked storage
Alarmed containers
Tool and plant security procedures
Temporary works can include:
Scaffolding
Hoardings
Formwork
Falsework
Temporary supports
Some policies include temporary works automatically; others require them to be specified with a separate sum insured.
If you’re working on an existing building, you may need cover for:
The existing structure
The existing contents (if relevant)
This is not always included as standard. Renovation projects are where CAR gaps show up most often.
If damage causes a delay, the project owner may lose rental income or trading income. Optional extensions can cover:
Loss of rent
Additional finance costs
Increased cost of working
This is more common on commercial developments and funded projects.
Many CAR policies can include public liability, covering injury or property damage to third parties arising from the works.
This matters because a “works damage” claim and a “liability” claim can happen together (for example, a collapse damages a neighbour’s property).
Employers’ liability is a legal requirement in the UK if you employ staff (including labour-only subcontractors in many cases). It’s not always included within CAR, but it’s often arranged alongside it.
CAR is broad, but it isn’t “everything.” Typical exclusions include:
Defective workmanship / design (often excluded, though resulting damage may be covered)
Wear and tear, gradual deterioration, corrosion
Mechanical or electrical breakdown (unless it causes insured damage)
Faulty materials (again, resulting damage may be covered)
Consequential losses (unless you add delay/loss of rent extensions)
Contractual penalties (liquidated damages) unless specifically insured
Known defects or pre-existing damage
War, terrorism (terrorism usually needs a separate arrangement)
Because wording matters, it’s worth checking:
Whether “resultant damage” is covered
Whether design cover is included (and at what limit)
Any hot works, timber frame, or basement excavation restrictions
CAR is useful for a wide range of construction roles, but the best arrangement depends on who controls the project and who carries the risk under the contract.
Main contractors often arrange CAR because:
They control site operations
They manage subcontractors
They’re typically responsible for the works until practical completion
Developers may arrange project CAR to:
Protect the asset being created
Satisfy lender/funder requirements
Reduce disputes between multiple contractors
Subcontractors may need:
Their own annual CAR (especially if they take responsibility for specific sections)
Public liability and professional indemnity (if design responsibility exists)
For large domestic builds, CAR can be appropriate where:
The contract value is significant
Multiple trades are involved
The homeowner wants a single policy covering the works
These policies are related, but they protect different things.
CAR insurance: protects the works and materials (property damage to the project)
Public liability: protects against third-party claims (injury/property damage)
Employers’ liability: protects against employee injury claims (legal requirement)
A common mistake is assuming public liability covers damage to the works. It usually doesn’t.
Contractors’ plant insurance covers owned or hired-in plant and machinery, such as:
Excavators, dumpers, telehandlers
Generators and compressors
Site cabins
CAR can sometimes include limited plant cover, but plant insurance is usually separate and more suitable for:
Off-site use
Road risks (if applicable)
Hired-in plant conditions
Insurers price CAR based on risk. Typical pricing factors include:
Contract value and duration
Type of works (new build vs refurbishment)
Construction method (timber frame, modular, steel frame)
Height and number of storeys
Basement works and ground conditions
Flood risk and proximity to water
Crime/theft risk
Neighbouring properties (especially for tight urban sites)
Claims history
Health and safety procedures
Site security measures
Hot works controls and permits
Excess level
Design cover extensions
Existing structures cover
Off-site storage and transit extensions
Underinsurance is one of the biggest CAR problems. If the sums insured are too low, insurers may reduce claim payments.
Set this to the full reinstatement value of the works, typically:
Total contract value (including labour and materials)
Plus an allowance for variations (commonly 10–20%)
Consider peak stock levels, not average. Think about:
Lead times for replacement
High-value items (steel, copper, M&E components)
For refurbishments, set a realistic value for the existing building elements at risk.
CAR cover typically runs:
From commencement of works
Through the construction period
Up to practical completion
Some policies can be extended to include:
Maintenance periods
Defects liability periods
Visit maintenance (cover for damage caused while returning to site)
This is a key area to align with your contract terms.
Secure storage and inventory control
CCTV and lighting
Marking and tracking high-value items
Hot works permits
Fire watches
Proper storage of flammables
Weather monitoring
Temporary protection and drainage
Secure coverings and scaffolding
Method statements and supervision
Clear segregation of trades
Good housekeeping and site traffic management
To get accurate terms, be ready with:
Project description and scope
Contract value and duration
Location and postcode
Construction type and number of storeys
Any basement works, underpinning, or demolition
Security arrangements
Existing structures details (if applicable)
Claims history
Copies of contract clauses (sometimes requested)
Confirm the policy covers your role (contractor vs developer vs subcontractor)
Check contract works, materials, and temporary works limits
For refurbishments, confirm existing structures cover
Review exclusions for hot works, timber frame, basements, water ingress
Ensure the policy period matches the programme (plus contingency)
Align excess levels with your cashflow
Make sure public and employers’ liability are correctly arranged
Contractors’ All Risks insurance is one of the most important protections on a UK construction project. The right policy can prevent a single event—fire, theft, flood, or accidental damage—from turning into a major financial loss and a contractual dispute.
If you’re arranging CAR, focus on the fundamentals: correct sums insured, the right extensions for your project type (especially refurbishments), and clear alignment with your contract responsibilities.
No. CAR insurance isn’t a legal requirement, but it’s commonly required by contracts, funders, and clients.
Usually the cost of correcting defective workmanship is excluded. However, many policies cover the resulting damage caused by the defect.
Not typically. Tools are usually covered under a tools or contractors’ plant policy. CAR focuses on the works and materials.
Sometimes. Many insurers offer CAR packaged with public liability, but it depends on the policy.
“Builders’ insurance” is a broad term. CAR is the specialist policy for the contract works; builders may also need public liability, employers’ liability, and plant cover.
Yes. Single project CAR is common for developers and contractors working on one large contract.
Often yes, if they are declared and the policy is structured to include them. This should be confirmed in the wording.
Usually cover ends at practical completion, but maintenance/defects liability extensions can be added.
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