What is Construction All Risks Insurance (CAR Insurance)?

Construction All Risks Insurance (CAR)

is a type of insurance that provides coverage for construction projects, buildings, or structures during the construction phase. It covers:

• Damage to property or construction works
• Accidents or unforeseen events such as fire, flood, earthquake, or storms
• Legal liability to third parties, such as injury, death, or property damage caused by the construction activities

Key Features of CAR and Contract Works Insurance

Types of Policies

1. CAR (Contractors All Risks): The contractor is the policyholder.
2. Contract Works Insurance: The project owner is the policyholder.

Main Coverage

• Damage from accidents, unforeseen events, or natural disasters
• Damage during installation, transportation, or assembly
• Damage to machinery or equipment at the construction site
• Legal liability to third parties (Third Party Liability)
• Legal compensation (Legal Liability)

Common Exclusions

• Design faults or defective design
• Damage from improper use or substandard materials
• Normal wear and tear or natural deterioration

1. Non-Life Insurance Act B.E. 2535 (1992)

• Requires insurance companies to obtain a license and regulate the terms of insurance policies.

2. Building Control Act (Amended) B.E. 2562 (2019)

• Buildings taller than 23 meters or larger than 10,000 square meters are required to have third-party liability insurance before construction or renovation is permitted.

3. Terms of Reference (TOR) in Construction Contracts

• Many construction projects, especially public or large-scale ones, mandate contractors to purchase CAR and CGL insurance.

• Construction drawings or BOQ (Bill of Quantities)
• Project details and location
• Total project value (including material and labor costs)
• Construction period
• Information about the project owner or contractor

1. Damage to Renovation Work

Covers loss or damage to the renovation project caused by fire, water leaks, collapse, or accidental events during construction.

2. Damage to the Existing Property

Can be extended to cover the original structure thats not being renovated (e.g., old roof, existing walls).

3. Third-Party Liability

Protects against injury to others or damage to neighboring property e.g., falling debris damaging a neighbors car.

4. Debris Removal Costs

Covers the cost of clearing debris or demolition after an incident (included in the insured amount).

Ideal for:

Homeowners hiring contractors for renovation, or contractors seeking to reduce risk during construction.

Coverage Period: Duration of the renovation project (e.g., 60-120 days)

Premium: Starts from around 0.5%1% of the renovation value