Contractors All Risk (CAR) insurance is a type of insurance policy that provides coverage for various types of risks faced by contractors or construction companies. The policy is designed to cover the insured for losses or damages caused due to unforeseen accidents that may occur during the construction process. In the Philippines, this type of insurance is becoming increasingly popular as more construction projects are being proposed and implemented.
The main purpose of contractors all risk insurance in the Philippines is to protect contractors and construction companies from financial loss caused by damage to the property being constructed. This could be due to fire, flood, earthquakes, theft, or any other unforeseen incident. The policy also covers the materials, tools, and equipment used in construction, including theft and vandalism.
The contractors all risk insurance policy is not mandatory by law, but many clients require contractors to have it in place before starting any construction project. This is because the policy provides peace of mind to the client that the contractor has put measures in place to protect the project from unforeseen risks.
The policy typically covers three main areas: material damage, third party liability, and personal accident coverage. Material damage covers the costs associated with damage to the project due to unforeseen events such as fire, flood, or earthquake. Third-party liability covers the costs associated with damages or injuries caused by the construction site to a third party, such as a passerby who was injured on the site. Personal accident coverage covers the costs associated with accidents that may occur on the construction site, including medical expenses and loss of income.
It is important for contractors and construction companies to understand that the contractors all risk insurance policy does not cover everything. For example, the policy does not cover losses or damages caused by willful acts or gross negligence. Additionally, the policy may have certain exclusions, and it is important to read the policy document carefully to understand what is covered and what is not.
In conclusion, contractors all risk insurance is a crucial policy for contractors and construction companies in the Philippines. It provides protection against unforeseen risks and helps to ensure that construction projects are completed without unnecessary financial loss. By understanding the coverage provided by the policy and selecting the right insurance provider, contractors can help to mitigate risks and protect their investments.