Who needs contractors all risk insurance

Who needs contractors all risk insurance?

Imagine you’re halfway through a big construction project, perhaps at a bustling construction site, and a freak storm rolls in. Equipment gets damaged, materials are ruined, and work grinds to a halt. Now, picture having a financial safety net that’s got you covered for every twist and turn – Contractors All Risk (CAR) insurance.

Also known as Contract Works Insurance or simply contract works, this is no ordinary policy. It’s designed to be a comprehensive shield for contractors and employers alike, even covering employers liability insurance aspects. From covering accidental losses to extending protection to multiple stakeholders like financers and subcontractors, CAR insurance is the Swiss Army knife in your construction project toolkit.

But hang on, it doesn’t stop there. Not only does this insurance safeguard your own plant and property, but it also looks out for the people involved in its construction. So, whether you’re working on a single project or juggling multiple, whether you’re a big construction company or a DIY home builder, this guide will give you the lowdown on why CAR insurance, including its risk insurance cost, is not just an option—it’s a necessity.

In this comprehensive guide, we’ll break down the jargon like professional indemnity insurance, bust myths, and even share real-life stories to help you navigate the complexities of Contractors All Risk insurance. Stick around, this is the one-stop resource you won’t find anywhere else.

What exactly is Contractors All Risk Insurance?

It sounds like something that covers all risks, but what does that mean? Let’s break it down.

Contractors all risk insurance, often called CAR insurance (nope, not the vehicle kind), is a particular type of policy designed for folks in the construction business. Whether you’re building a skyscraper or a garden shed, this insurance has got your back. It offers a wide range of risk insurance cover that can pop up during construction, like damage to materials, equipment failure, or even vandalism.


What’s on the list of things it covers? While every policy can differ a bit, here are some common coverages you can expect:

  • Material damage: Think of this as a safety net for all the stuff you use on the job. This coverage will sort you out if a sudden storm wrecks your materials.
  • Third-party liability: Accidents happen, and sometimes other people or their property get hurt. This part of the policy can help you deal with any legal headaches.
  • Equipment and tools: That expensive drill and those custom scaffolds? Yep, they can be covered, too.

Of course, it’s crucial to read the fine print because some things might not be covered. For example, normal wear and tear or intentional damage won’t make the cut.

For those times when you’re using machinery you don’t own, hired in plant coverage ensures that even leased equipment is protected under your Contractors All Risk insurance.

There you have it – contractors all risk insurance in a nutshell. It’s like a Swiss Army knife of coverages, tailored for the twists and turns of construction work.

The nitty-gritty: Types of coverages

Insurance can often feel like a maze, with all sorts of paths leading to different types of coverage. Let’s dig into the various types of coverages that fall under contractors all risk insurance.

Material damage cover

First up, let’s talk about material damage cover. Imagine you’ve got a pile of premium wood ready for a decking project, and then comes a downpour. What now? Material damage cover steps in to save the day. It’s like a guardian angel for all the materials you’ll use in your project – from bricks and wood to more specialized stuff like electrical fittings.

Liability cover

Next, we’ve got liability cover. Let’s say you’re working on a site, and a passerby trips over some cables and gets injured. Legal matters can quickly get complicated and expensive – liability cover handles these unexpected issues, offering you legal and financial backup.

Liability cover handles unexpected legal issues that may arise, offering you financial backup for legal fees and legal costs if an accident on site leads to legal action.

Tool and equipment cover

Lastly, let’s not forget about those precious tools and equipment. Whether it’s a high-tech drill or a simple hammer, these items are the backbone of any construction project. Tool and equipment cover ensures that if your tools get stolen or damaged, you’re not digging into your own pocket to replace them.

These are the core types of coverages you’ll find in contractors all risk insurance policy. It’s not just a one-size-fits-all; you can tailor it to suit the unique needs of your project.

Who really needs contractors all risk insurance?

Who actually needs this all risk insurance? … it’s not just for big construction companies. With risky construction projects, the risk insurance cover offered by CAR insurance provides an essential safety net protecting your business from financial loss.

Construction companies

If you’re in the business of building big stuff like skyscrapers, hotels, or shopping malls, this insurance is your best mate. It’s a no-brainer, really. With projects of this scale, the risks are higher, and so are the stakes. A minor hiccup can cost you a fortune unless you’ve got the right coverage.

Small contractors

Small contractors often rely on hired in plant for specialized jobs. With Contractors All Risk insurance, they can rest easy knowing that even rented machinery is covered in case of unexpected events.

If you’re a small contractor, you might think this isn’t for you. Even if you’re doing smaller projects like home renovations or garden makeovers, the risks are still there.

Your tools could get stolen, or a sudden hailstorm could ruin your freshly laid concrete. So, for the small contractors out there, this isn’t an “extra”; it’s a necessity.

DIY home builders

Here’s a curveball—DIY home builders. If you’re building a garden shed or a treehouse for your kids, you’re technically a builder for that project. While it may seem over the top, getting a short-term contractors all risk policy can save you from some unexpected headaches.

So, whether you’re the boss of a construction company, a small contractor, or even a weekend DIYer, contractors all risk insurance is something you should seriously consider. It’s like having a safety net, no matter how high or low you’re flying.

Common myths and misconceptions

CAR insurance goes beyond basic public liability insurance to cover damages to your own materials, tools, and temporary buildings on a construction site.

Insurance can be a murky pond, and when it comes to contractors all risk insurance, there’s no shortage of myths floating around. Let’s set the record straight and bust some of those misconceptions.

Not just public liability

One of the biggest myths is that contractors all risk insurance is just another name for public liability insurance. Nope, they’re not twins; they’re more like cousins. 

While public liability covers you for any harm you might cause to other people or their property, contractors all risk insurance goes the extra mile. It also covers your materials, tools, and even some types of accidental damage.

Cost factor

“Ah, it’s too expensive!” How many times have you heard that? Truth is, the cost of NOT having this insurance can be way more expensive. 

Imagine having to replace all your tools or facing a hefty lawsuit without any backup. This insurance is less of a cost and more of an investment in your peace of mind.

How to shop smart: Choosing the best policy

So, you’ve decided you need contractors all risk insurance. Great choice! But how do you sift through the jargon and find the best policy for you? We’ve got some pro tips to help you shop smart.

Key features

First off, know what you’re looking for. Make a checklist of the features that are must-haves for your project. Having a list will make your search more focused whether it’s material damage cover or third-party liability.

Comparing quotes

Now, don’t just jump on the first quote you get. Shop around a bit. Use online comparison tools or talk to different providers. The goal is to get the most bang for your buck without skimping on crucial coverages.

UK-specific providers

Since most of our readers are from the UK, let’s talk about some regional top providers. Companies like BuildSafe, CoverWallet, and Simply Business offer a range of policies tailored for the UK market. Give them a look; you might find the perfect fit.

Real stories: Lessons from the frontline

We’ve talked a lot about the theory of contractors all risk insurance, but sometimes, real-life stories hit home the hardest. Let’s look at a couple of instances where this type of insurance made a big difference – or could have.

The case of the stolen tools

Picture this: A small contractor had just invested in a set of high-end power tools. All was going well until one morning, they discovered their van had been broken into, and the tools were gone. 

Luckily, their contractors all risk insurance covered tool theft, and they were back in business in no time.

The unfortunate accident

In another story, a construction company was building a local community centre. During construction, a heavy beam accidentally fell, damaging part of the existing structure. 

It was a costly mistake, but they could handle the repairs without a financial meltdown thanks to their insurance. Thanks to their risks insurance policy, the construction company was able to handle the expensive repairs to the existing third-party property without financial hardship.

The missed opportunity

Lastly, let’s talk about a DIY home builder who decided to skip on insurance for a small garden project. A sudden storm destroyed almost all the materials, leaving them with a hefty bill and a lesson learned the hard way.

FAQs: Your Questions Answered

We’ve covered a lot of ground, but you might still have some burning questions about contractors all risk insurance. Let’s tackle some of the most common queries.

Is contractors all risk insurance mandatory?

Contractors all risk insurance is not mandated by law in the UK. However, clients and main contractors may require subcontractors to carry contractors all risk cover and provide proof of insurance depending on the terms of the construction contract.

While having contractors all risk insurance is not a legal requirement, it provides important protection for builders and contractors exposed to the many risks associated with construction projects. It is considered an essential cover to have.

Does contractors all risk insurance cover subcontractors?

Whether subcontractors are covered under a contractors all risk policy depends on the specific terms and conditions of the insurance policy. Some contractors all risk policies may allow including subcontractors working on the project as named insured parties.

However, the main contractor’s insurance likely won’t protect subcontractors automatically. To ensure adequate protection, it is advisable for subcontractors to have their own standalone contractors all risk insurance policy covering their portion of the contract works.

What is contractors all risk insurance for?

Contractors all risk insurance provides comprehensive cover for property developers, builders, and contractors during construction and renovation projects. It covers damage to contract works, plant, tools, equipment, temporary buildings, and includes public liability insurance to cover injury or property damage claims. Contractors all risk insurance protects against a wide range of risks on building sites.

Do builders need all risk insurance?

Yes, all risk insurance is an essential coverage for builders and contractors to protect their business from the financial risks associated with construction projects. The risks insurance cover protects against theft, vandalism, weather damage, etc. that can lead to costly delays and repairs. It provides peace of mind and financial stability for builders against unforeseen disasters on site.

Do self employed contractors need insurance?

Self employed contractors definitely need to invest in insurance, including both public liability insurance and contractors all risk insurance. Public liability insurance covers legal costs and claims if their work leads to injury or property damage. Contractors all risk insurance protects their tools and equipment and covers damages to the contract works. Having proper insurance protects self employed contractors from major financial losses.

What is public liability insurance for contractors?

Public liability insurance is crucial for contractors to cover legal responsibilities and property damage risks. It protects the contractor if their work or negligence on a site leads to injury or damage suffered by a third party like a worker or passerby. Public liability insurance can pay for medical treatment, property repairs, and legal costs up to the policy limit. It covers both injury and property damage claims.

Is all risks insurance the same as contract works?

Contractors all risk insurance policies bundle contract works cover along with public liability cover, own plant cover, tools cover, and more. So while contract works insurance specifically covers damage to permanent and temporary works at a site, all risks insurance provides wider comprehensive cover for contractors and construction projects. The terms may sometimes be used interchangeably.

What insurance does a sole trader consultant need?

As a minimum, sole trader consultants need public liability insurance and professional indemnity insurance. Public liability insurance protects against claims for property damage or bodily injury caused to clients. Professional indemnity insurance covers potential compensation claims as a result of bad advice or an error by the consultant leading to client losses. Other useful covers can include travel insurance, cyber insurance, and office contents insurance.

Do Labour only subcontractors need their own insurance?

Yes, labour only subcontractors are responsible for having their own public liability insurance and other covers. They should not rely on the main contractor’s insurance, as it likely won’t protect them for any claims due to their work or negligence. Taking out correct public liability insurance and other policies protects labour only subcontractors against expensive legal action and claims.

What insurances should a consultant have?

The key insurances for consultants are professional indemnity insurance, public liability insurance, and cyber liability insurance. Professional indemnity covers compensation claims for clients suffering losses due to the consultant’s advice. Public liability covers bodily injury and property damage claims. Cyber insurance protects against hacks, data breaches, ransomware, etc. Other common covers are employer liability insurance, office insurance, travel insurance, and business interruption insurance.


We’ve navigated through the ins and outs of contractors all risk insurance, debunked myths, and even heard some real-life stories. So, what’s the bottom line?

Contractors all risk insurance isn’t just another checkbox on your to-do list; it’s an essential safety net for anyone in the construction business. 

Whether you’re running a large construction company, a small contracting business, or even dabbling in DIY projects, this insurance has something for everyone. It protects not just your materials and tools but also your financial stability and peace of mind.

So what’s stopping you? Take the next step. Look into your options, compare quotes, and find a policy that fits like a glove.