Contractors All Risks Insurance
Cover for the work itself while a job is in progress: the structure being built, the materials on site waiting to go in, and the plant and temporary works around it.
What Is Contractors All Risk Insurance?
Contractors all risks is built around the work itself while a job is in progress: the structure being built, the materials on site waiting to go in, and the plant and temporary works around it. If a half-built extension burns down, floods or is broken into before handover, this is the cover meant to put it back. It commonly includes a contract works section, but the sections, extensions and exclusions vary by insurer, so materials in transit or stored off site are worth confirming rather than assuming.
It answers a question every contractor eventually faces: until the job is handed over, the work is usually still your responsibility. Public liability is not designed to rebuild your own unfinished structure, and the client's buildings policy generally is not either.
You will see the same cover called contract works insurance, construction all risks, or simply CAR. The wording varies between insurers more than the cover does. What matters is the sum insured, whether it matches your largest contract, and whether the contract you have signed asks for anything specific.
What Contractors All Risk Insurance Covers
The contract works
The structure as it is being built, including work already in place and work in progress, up to the contract value stated on the schedule.
Materials on site
Goods and materials delivered and waiting to go in. Materials in transit and materials stored off site are commonly extensions rather than standard, so confirm them rather than assuming.
Temporary works
Scaffolding, site huts, hoarding, formwork and the rest of what has to be there to build the job but is not part of the finished structure.
Plant and equipment on site
Owned and often hired in plant while it is on the contract, depending on how the policy is arranged.
Joint names cover
The works insured in the names of both parties, so both have rights under the policy and the insurer cannot recover from the other. It has to be set up that way from the start.
Where The Cover Stops
Wordings differ between insurers, so treat these as the usual position rather than as universal fact. Where one of them matters to you, it is worth checking on your own schedule before you need to.
Defective workmanship
The cost of redoing work that was done wrong is excluded. Damage caused by that work to the rest of the contract may be covered, depending on how the exclusion is drafted. The two are routinely confused.
The existing structure
On an extension or a refurbishment, the building you are working on is not the contract works. It needs either an existing structures extension or the employer's own policy, and a JCT form will say which.
Contract values above the stated limit
The sum insured is a maximum contract value. Take on a job above it and that job sits outside the cover. Growing contractors trip over this more than any other condition.
Underinsurance and average
Set the contract works figure below the full reinstatement cost of your largest job and a claim can be reduced in proportion. Where an average condition applies, the settlement follows the share your figure bears to the true value.
Theft without forced entry
Site theft cover usually requires the site to have been secured. An open site with materials stacked on it overnight is a difficult claim on most wordings.
Joint Names, And Why The Contract Decides
Standard construction contracts do not leave the works insurance to chance. JCT and similar forms set out who insures the works, for how much, and in whose names, and the answer differs depending on whether it is a new build, an extension to an existing structure, or work to a building the employer already owns.
A joint names policy insures the works in the names of both parties, so both have rights under it and the insurer cannot turn round and recover from the other. If your contract calls for joint names, it has to be arranged that way from the start rather than added later, and a policy in your name alone is a breach of contract quite apart from any gap it leaves.
Send us the insurance clause with your quote request. It takes a minute to read and it is the difference between cover that satisfies the contract and cover that merely looks like it does.
Do You Actually Need It?
It is not required by law. Whether you need it comes down to one question: if the work you have done so far were destroyed tonight, who pays to do it again?
On most domestic jobs, extensions, loft conversions and refurbishments, that is you, until practical completion. On larger sites the main contractor or the employer may insure the works for everyone, in which case a subcontractor may need only public liability. The contract decides it, not the size of the job, and plenty of contractors carry cover they do not need on one job and none on the next.
If you are not sure which position you are in, that is worth a phone call before the job starts rather than after something has happened on it.
Setting The Sum Insured
The contract works sum insured should reflect the full reinstatement cost of the largest job you will have running, not the profit on it and not the average. That means the labour and materials to build it again from the beginning, including the cost of clearing what is left of the first attempt.
Set it too low and a claim can be reduced in proportion. Where an average condition applies, the settlement follows the share your figure bears to the true value, which on a serious loss is a large shortfall on top of an already bad week.
It is a common and entirely avoidable fault. Review it whenever you win something bigger than usual rather than once a year at renewal.
How Much Does Contractors All Risk Insurance Cost?
You will see contractors all risks advertised from around £110 a year, and that is a real price. It buys a standalone works policy for a sole trader working on small contracts, and if that is genuinely all you need, it is good value.
Most contractors need more than that. Once you employ anyone, hire in plant, or work to contracts that require public liability at £5 million or £10 million, the works cover belongs alongside those in a contractors combined policy. Across the contractors combined policies we place, premiums start at around £500 a year for a small contractor, with larger contractors well beyond that.
Be wary of comparing that against a headline figure without checking what sits behind it. Trade makes an enormous difference, with roofing using heat, scaffolding and groundworks all pricing well above general building, and a cheap quote often turns out to carry a height restriction, a low contract works limit, or no works cover at all.
These are premiums arranged for other contractors and are not a quote.
- Annual turnover and the mix of work behind it
- The value of the largest contract you work to
- Your trade, since roofing with heat and groundworks rate well above carpentry
- How much of the work is subcontracted, and to whom
- The contract works sum insured, and whether it matches your largest job
- Your claims record over the last five years
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a quote.
What We Need To Quote
- Estimated turnover for the coming year
- The largest contract value you expect to hold, and for how long
- Whether the contract requires joint names, with the insurance clause if so
- Whether you are working on an existing structure
- Materials held on site, in transit or stored off site
- Any claims in the last five years
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Contractors combinedThis cover as one section of a package, alongside liability, plant and tools.
- Public liabilityThe other side of the same job: damage to other people rather than to the works.
- Plant insuranceOwned and hired in machinery, including continuing hire charges.
- Tradesman insuranceThe trade version of this, with tools and van cover built around it.
- All trades A to ZCover written for your specific trade rather than the general product.
- Talk to a brokerTell us what you do and we will say which of these you actually need.
Common questions
What does contractors' all risks mean?+
It is cover for the physical work itself while a job is in progress. The structure you are building, the materials on site waiting to go in, and usually the plant and temporary works around it. If a half-built extension burns down, floods or is vandalised before handover, contractors all risks is the section that pays to rebuild it. The name is old-fashioned insurance language: "all risks" means it covers sudden accidental loss or damage generally, rather than listing named perils, subject to the exclusions in the policy.
What is the difference between public liability and contractors all risk insurance?+
They cover opposite sides of the same job. Public liability covers damage you cause to other people and their property. You drop a tile through a customer's conservatory roof. Contractors all risks covers damage to the work you are being paid to build, which is your own responsibility until it is handed over. Public liability is not designed to rebuild your own half-finished structure, and contractors all risks is not designed to answer a third party's injury claim. Most contractors need both, which is why they are usually written together.
Do subcontractors need contractors all risk insurance?+
It depends who carries the risk for the works under the contract. On many sites the main contractor or the employer insures the works and the subcontractor only needs public liability. But if your contract makes you responsible for your own work until practical completion (which is common on smaller domestic jobs where you are effectively the main contractor) then the works are yours to insure. Read what the contract says about who insures the works, and if it is not clear, ask before you start.
How much does contractors all risk insurance cost?+
You will see it advertised from around £110 a year, and that is genuine, but it is a standalone works policy for a sole trader with small contracts. Most contractors need the works cover alongside public and employers' liability, plant and tools, which is a contractors combined policy. Across the contractors combined policies we place, premiums start at around £500 a year for a small contractor, with larger contractors well beyond that. What moves it is your turnover, the contract values you work to, the trade (roofing with heat or scaffolding rate very differently from first-fix carpentry) and your claims record.
Is contractors all risk the same as contract works insurance?+
In everyday use, yes. Contract works, contractors all risks, construction all risks and CAR all describe cover for the work in progress. Strictly, "contractors all risks" often describes the wider package including plant, temporary works and sometimes own plant hired in, while "contract works" is the section covering the structure and materials. The words vary between insurers more than the cover does. What matters is the sum insured and what the policy actually lists.
What is a joint names policy, and do I need one?+
A joint names policy insures the works in the names of both parties (typically the contractor and the employer, and sometimes funders or subcontractors as well) so both have rights under the same policy and the insurer cannot recover from the other party. JCT and similar standard contracts specify who insures the works and in whose names, and getting it wrong is a breach of contract quite apart from leaving a gap. If your contract asks for joint names, tell us before cover starts, because it has to be set up that way rather than added afterwards.
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Related reading
Guides from our team on the cover discussed on this page.
