A construction or installation project is concentrated risk: many parties, large values, tight deadlines – and the usual logic of annual policies isn't enough here. Project insurance is built for exactly this situation. This article is an overview; the in-depth content lives on the epites.biz specialist site.
- Construction-all-risks (CAR/EAR) insurance's base cover is the work under construction and the materials awaiting installation; the liability section for damage caused to third parties and the cover for construction machinery are typically available as separate sections or endorsements, each with its own limit – the specific content depends on the policy and its terms.
- Who needs it? It can fall to either the investor or the contractor – the contract and the tender decide who takes it out.
- When? Per project, or as an annual master policy for recurring work.
What is it, and what does it cover?
The backbone of project cover is the work under construction itself: damage occurring during the project to the completed structure, to materials awaiting installation, to scaffolding and to construction machinery. A liability element builds on this: damage caused by the works to a neighbour, a passer-by or utility infrastructure. Cover is tied to the project's timeline – it applies between the start and handover, and can be extended with testing-period and warranty-period add-ons.
Who needs it?
This is decided project by project, and typically the contract sets it out: the client expects it from the contractor, or the investor takes it out for the whole project, covering every party involved. As a contractor, this means that reading the tender and the contract for insurance requirements is part of the job – the insurance requirements of tenders and public procurement article covers this. The subcontractor chain deserves particular attention: who is working under whose cover.
When does it come up, and what should you watch for?
Typical moments: the start of a tender (with the required certificate of insurance), a larger investment of your own, or an unexpected project loss in the trade. Three things are worth watching: the cover should apply to the project's full value (underinsurance can bring proportional reduction here too), the period of cover should match the real schedule (extend it if there's a delay!), and the liability limit should meet the level required in the contract. On the relationship with the usual annual liability cover: professional and general liability overview.
Want to go deeper?
This article is deliberately an overview: the detailed information – covers, exclusions, practical examples – lives on the area's own specialist site.
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