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Construction & Engineering

Contractors All Risk (CAR)

Comprehensive protection for contract works, construction plant, and third-party liability.

Overview

Contractors All Risk (CAR) insurance is a non-standard insurance policy that provides coverage for both property damage and third-party injury or damage claims, the two primary types of risks on construction projects.

1Who needs this?

Main Contractors
Sub-contractors
Property Developers
Project Owners
Financing Banks

What it covers

  • Contract works (permanent and temporary works)
  • Construction plant and machinery
  • Materials on-site
  • Third-party bodily injury
  • Third-party property damage
  • Removal of debris

What is NOT covered

  • Loss or damage due to faulty design
  • Wear and tear, corrosion, or oxidation
  • Inventory losses
  • War or nuclear risks
  • Consequential loss

Important Note: Coverage details, limits, and exclusions may vary depending on the specific policy terms, the insurer selected, and individual risk profiles. Always refer to the actual policy document for full terms and conditions.

Common Claim Scenarios

Monsoon Flood Damage

"During a major monsoon event in Penang, a construction site for a new high-rise was flooded, damaging the foundation works and expensive machinery. The CAR policy covered the cost of pumping out the water, repairing the damaged foundation, and the repair costs for the submerged machinery."

Frequently Asked Questions

Is CAR insurance mandatory in Malaysia?
While not always legally mandated by the government, most developers and government contracts (JKR) require it before work can commence.
Does it cover my workers?
CAR typically covers third-party liability. Worker injuries are usually covered under Workmen's Compensation or SOCSO top-ups.
Can I add coverage for existing property?
Yes, you can often add an endorsement to cover damage to existing property owned by the principal or contractor.
What is the 'Maintenance Period' cover?
It covers damage that occurs during the maintenance period (usually 12-24 months) after project completion, provided the cause originated during the construction phase.
How is the premium calculated?
Premiums are based on the total contract value, project duration, location, and the specific risks involved (e.g., proximity to water or other buildings).

Other Insurance Solutions

Erection All Risk (EAR)

Specialized for the installation of machinery, plant, and steel structures.

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Commercial General Liability (CGL)

Covers bodily injury and property damage to third parties arising from your operations.

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Product Liability

For manufacturers, importers, and distributors against claims of injury or damage caused by products.

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