Contractors works insurance is typically taken out jointly by both the contractor and the employer at the same time, with multiple parties included in the same policy.
They each keep the right to file a claim against the insurer, although all parties also have the responsibility of notifying the insurer of any grievances and damages that could bring about a claim, even if there is no intention to make one at that time.
In essence, if there are unforeseen events, the contractors all risk insurance will cover the costs of the work being re-done.
An example of this would be if, during the extension of a house, it was hindered by fire, the customer is not at fault and neither are the contractors. As a result, contractors all risk insurance would payout for the work to begin again.
These policies cover a wide range of aspects, from plant hire costs to any temporary works. Contractors all risk insurance policies can save you money in the long run, should the above ever occur.
What does a CAR policy cover?
Badged up as ‘all risk’ and offering comprehensive cover, a CAR insurance policy can mislead people into believing they don’t need any other insurance in place – but you do!
Contractors all risk can cover work carried out by both the contractor and sub-contractors. It can also include additional cover for own plant, hired-in plant, employees’ tools and public and employers’ liability insurance – but these additions don’t generally come as standard and need to be added into your policy.
Don’t second-guess your cover. Instead, chat to a CAR expert here at Rigby Financial, who will be able to offer you industry insights and guidance to ensure you, and your build, are fully protected.
Why invest in a CAR insurance policy for your construction project?
Worst-case scenario preparation
A construction site is a high-risk area. Countless things could go wrong – and, if they do, it’s your responsibility to make sure the problem is rectified and the job is finished.
For example, you’re building an extension and a fire starts inside the property. As the contractor, you’d be expected to fix any property damage plus the extension for no extra cost. It may have been a freak accident, but you agreed on a price for the work and, no matter what, you’re expected to stick to it.
This is where contractors’ all risk cover can help. The policy would cover the cost of any repairs and allows you to get the project back on track – keeping the property owner happy. It prepares you for the worst-case scenario and provides peace of mind that, whatever happens, you’re able to complete the job without suffering financially.
Asset protection
Being your own boss is great, but it means you’re responsible for your own tools and equipment and, if these are damaged or stolen, you could face serious financial repercussions.
Tools and equipment can be expensive. If you can’t afford to replace them, you’re likely to lose your current construction job, as well as miss out on future contracts.
After all, a tradesman can’t work without his tools, and it’s easy for the situation to quickly get out of hand, creating major financial risks.
Again, this is where a contractor’s all risk policy can be of benefit. Such insurance can offer protection for all building materials, plant machinery, tools, equipment and hired-in property. In the event of damage or theft, they can be quickly replaced, and you’d be free to get on with the job as though it never happened.
Business security
Employers want peace of mind as much as you do. If they can see you’re a reliable contractor that’s willing to invest in contractors all risk insurance, they’re more likely to recruit you for the job.
That’s why it’s often a good idea to invest in a blanket contractor’s all risk policy. This covers all projects undertaken within a pre-specified period of time and, as it’s already in place, it could be the deciding factor – helping you to win new jobs and boosting your bottom line.
Is contractors all risk insurance the same as public liability insurance?
No, public liability insurance is intended to protect you from third-party injury claims. For example, if a client slipped walking through the office and injured themselves. It also safeguards against any damage that may occur as a result of business activities, such as if your team accidentally damages property while carrying out work.
A basic CAR policy won’t cover this as standard, but it’s worth being aware that policies can easily be adapted to suit requirements. It’s common to add on both public and employers’ liability insurance to ensure you have fully comprehensive cover.
Do I need to take out a new policy for each project?
This is something we get asked a lot, and the answer is easy – no!
If you’re picking up a one-off build, ‘single period’ project cover might be the best option. This would cover you for that build.
However, if you have multiple construction projects on the go, or you’re part of a large-scale operation, you may find an annual policy – covering you for all jobs carried out within that 12 months – is a more efficient and cost-effective way to insure.
How much does contractors all risk insurance cost?
Contractors all risk insurance generally costs between 1% and 4% of the total contract value for single-project coverage. For small-to-medium trade businesses seeking continuous cover when working on third-party property, it can cost between £300 and £1500 per year.
For larger-scale operations with multi-employee policies and construction contracts, a CAR insurance policy can exceed £2000 per year.
Obtain contractors all risk insurance from Rigby Financial
If you would like to find out more about contractors all risk cover and how it could help you, please feel free to get in touch.
Our team of specialist advisors, here at Rigby Financial, are always happy to assist. We can provide further information on the benefits of this type of insurance, and whatever your trade (e.g. builder, bricklayer, plumber, etc.), help to identify the best policy for you.
Being a contractor doesn’t have to be risky. Invest in the right insurance and protect yourself against all eventualities. Either call us today on 01744 886077 to discuss contractors’ all risk insurance in further detail, or send an email to enquiries@rigbyfinancial.co.uk and we’ll get back to you as soon as possible.
