Contractors All Risks Insurance UK (CAR Insurance Explained)
What is Contractors All Risks Insurance?
Contractors All Risks Insurance (CAR) is a specialist construction policy designed to cover physical loss or damage to works, materials, and construction sites during a project. And is a core components of construction insurance programmes in the UK.
It is one of the most important types of construction insurance in the UK, providing protection for contractors, developers, and project owners against unexpected events during the build phase.
CAR insurance typically applies from:
Site setup
Through construction
Up to project completion
What Does Contractors All Risks Insurance Cover?
A comprehensive CAR policy can include:
✔ Damage to Works in Progress
Covers accidental damage to the structure being built, including fire, flood, storm, or vandalism.
✔ Materials and Equipment
Protection for building materials stored on-site or in transit.
✔ Plant and Machinery
Optional cover for construction plant, tools, and hired-in equipment.
✔ Temporary Structures
Includes scaffolding, site cabins, and temporary works.
✔ Third-Party Liability
Often combined with public liability insurance to cover injury or property damage claims.
What is NOT Covered by CAR Insurance?
Understanding exclusions is just as important.
Typical exclusions include:
Wear and tear or gradual deterioration
Faulty workmanship (but resulting damage may be covered)
Design errors (covered under professional indemnity instead)
Known defects or pre-existing issues
👉 This is where many projects become underinsured due to gaps between policies
Who Needs Contractors All Risks Insurance?
CAR insurance is essential for:
Main contractors
Subcontractors
Property developers
Housebuilders
Infrastructure and civil engineering projects
👉 If you are responsible for a construction project, CAR insurance is usually a contractual requirement
How Much Does Contractors All Risks Insurance Cost?
Premiums vary depending on:
Project value
Duration of works
Type of construction
Location
Claims history
As a rough guide:
Small projects (£100k–£500k): from £500–£2,000
Mid-size projects (£1m–£10m): £2,000–£15,000+
Large developments: bespoke pricing
👉 The key is ensuring the sum insured reflects full rebuild value
Real Claim Example: CAR Insurance in Action
A contractor working on a £6 million residential development experienced a major fire caused by an electrical fault during construction.
The incident resulted in:
Significant structural damage to partially completed units
Loss of materials and equipment on site
A delay of several months to the build programme
Total losses exceeded £1.3 million.
Because a comprehensive Contractors All Risks policy was in place:
The damage to the works was covered
Replacement materials and rebuild costs were paid
The project was able to resume without catastrophic financial impact
👉 Without CAR insurance, the contractor would have faced severe financial losses and potential project failure.
See some construction insurance claims examples
How CAR Insurance Fits Into a Construction Insurance Programme
Contractors All Risks Insurance is only one part of a wider structure. See our guide to insurance for complex constructions risks in the UK.
Most complex projects also require:
Delay in Start-Up (DSU) insurance
Professional indemnity insurance
Public and employers’ liability
Cyber insurance for digital risks
👉 For a full breakdown, see our guide to
insurance for complex construction risks in the UK
How to Reduce CAR Insurance Costs
You can lower premiums by:
Implementing strong site security
Maintaining health & safety procedures
Using experienced contractors and subcontractors
Starting insurance discussions early
Working with a specialist broker
👉 Insurers reward well-managed risks with better pricing
Why Work With a Specialist Construction Insurance Broker?
Contractors All Risks Insurance can be complex, particularly on larger projects.
A specialist broker will:
Structure policies to avoid gaps between covers
Access specialist insurers and Lloyd’s markets
Negotiate competitive premiums
Provide claims support if something goes wrong
👉 This ensures your project is fully protected from start to finish
If you're unsure how CAR fits into your overall cover, read our full guide on complex construction insurance.
Get Contractors All Risks Insurance Advice
Most construction projects we review have gaps between policies or incorrect sums insured, which can lead to serious issues at claim stage.
If you’re arranging cover for a project — or want a second opinion on your current policy — we can help.
📞 01792 001350
📧 [email protected]
👉 Speak to a specialist today and make sure your project is properly protected.
Check out our FAQ section on Contractors All Risks Insurance
