Contractors' All Risk Insurance in the UAE

Contractors' All Risk (CAR) insurance covers physical loss or damage to a construction project during the works, including permanent and temporary works and materials on site. It also covers third-party liability if the works injure someone or damage neighbouring property.

It isn't required by law for every project, but it's required by most construction contracts. Standard contract forms such as FIDIC require the works and third-party liability to be insured, and banks financing a project usually insist on it too.

Either can, depending on the contract. Most often, the main contractor arranges it in the joint names of the project owner, the contractor and subcontractors, so everyone working on the project is protected under one policy.

It covers the construction period stated in the policy, and usually a maintenance or defects liability period after completion, often 12 months. If the project runs late, the policy needs to be extended before it expires to avoid a gap in cover.

CAR is designed for civil construction, such as buildings, roads and infrastructure. EAR is designed for installing and testing machinery, plant and equipment. Projects that involve both can often be covered under a combined policy.

Usually not automatically. Contractors' plant and machinery, such as cranes, excavators and generators, is normally insured under a separate Contractors' Plant and Machinery policy, or added to the CAR policy as an extension.

Not under a standard CAR policy. If damage delays a project's completion, the lost revenue or extra financing costs can be covered by separate Delay in Start-Up (DSU) or Advance Loss of Profits (ALOP) insurance.

Insurers look at the contract value, the type and duration of the project, its location and construction methods, the contractor's experience and claims history, the deductible chosen, and the length of the maintenance period.