A contractor's all risk insurance is a type of coverage that protects construction projects, such as roads, hospitals, schools, railways, airports, residential buildings, commercial buildings, weirs and theaters. Other works at the construction site are also included in the policy. All materials and facilities stored at the site are also protected.
People who can purchase this policy include contractors, companies, owner or purchaser of the project and companies executing the project. It is advisable to include all the parties in the insurance contract to avoid gaps. The policy covers both sudden and unexpected risks such as a collapse, human errors, water damage, fire, floods and storms, construction faults and earthquakes. The policy may not cover several other risks, including war, work cessation, contractual liabilities, damage due to poor design, and wear and tear, among others.
The main advantage of this policy is that it covers a wide range of risks, thus protecting all the parties from losses and ensuring the continuation of the project. It also helps in reducing the overall construction cost for all involved parties. Companies purchasing contractor's all risk insurance also have the privilege of adding more items to the policy, such as terrorism, air freight, cross liability, glass breakage, escalation, debris removal and third-party liability.