Construction

Construction—insurance

Contractors’ all risks (CAR) insurance policies provide three kinds of cover:

1. •

   the insured’s legal liability for third-party property damage and bodily injury

2. •

   damage to the insured property

3. •

   business interruption losses, usually provided as an extension to cover

In order to trigger an indemnity under a CAR policy, the insured must establish that:

1. •

   the property is insured

2. •

   the loss or damage has occurred within the policy period

3. •

   the loss results from an insured peril

There will often be more than one insured party under a CAR policy. The insured is usually the employer and/or the contractor and, depending on the nature of the project, the policy might include subcontractors and/or other professionals that are involved. However, the fact that a subcontractor is insured under a project policy will not prevent a subrogated claim being brought by the insurer. Subrogation rights will be determined by the contractual arrangements between the parties, however some policies will exclude a claim in its entirety, if rights of recourse against a subcontractor have been impaired.

For information concerning CAR insurance policies, see Practice Note: Contractors’ All Risks