A Principal or a Contractor can be severely affected by a loss or damage to a civil construction or third party damage during the course of construction. Construction All Risk Insurance provides financial protection in case there is an accidental damage to the civil construction.
The policy covers for physical losses, damages or destruction to the property under construction & storage of materials of construction due to any cause including but not limited to accident, theft, burglary, acts of god, except for those specifically excluded in policy.
The main exclusion under the policy are losses due to faulty design, defective part, faulty workmanship, discovered inventory losses, consequential losses, wear and tear, gradual deterioration, willful act of negligence, war and allied perils and nuclear risks.
The policy also provides for covering third party property or bodily injury due to construction under progress including cross liability. It can be extended to cover expenses of removal of debris, architecture fees, damages to surrounding properties not forming part of the contracted works, maintenance /extended maintenance visits, contractors’ plant and machineries, fabricators premises and so on.
The policy is best suited for all civil construction projects like residential or commercial building, roads, bridges, dams, civil construction of factories, tunnels, laying of oil/gas/water supply pipelines etc.
The policy can be either bought by the Principal or Contractors and has provisions to cover the interest of the financiers as well as sub-contractors.
The policy period usually starts from the landing of the first material at the construction site till the project is completed and handed over to the principal. For a longer duration of projects the policy provides facility of installment premium.
Disclaimer: The above is a broad indication. The actual available are as described in the policy wordings of the insurance company and will be subject to the policy terms, conditions and exclusions.