Contractors’ all risk insurance (also known as contract works insurance) isn’t essential – but, it is a good idea!
With the potential to safeguard you, your team and your project, if you’re a tradesman, it’s usually always worth having in place.
What is contractors’ all risk insurance?
Construction sites are fraught with potential risks and dangers. Contractors’ all risk insurance (CAR) is designed to mitigate this risk, providing cover in the event of any accidental loss or damages that may occur during the construction period.
In simple terms, the policy does what it says on the tin. It protects the contract works against ‘all-risks’ on a construction site and, should the worst happen, it could be the lifeline you need to ensure your business survives.
What does it cover?
Badged up as ‘all risk’ and offering comprehensive cover, this type of 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, employee’s 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.
3 reasons to invest in contractors’ all risk insurance
1. It prepares for the worst-case scenario
A construction site is a very high-risk area. There are countless things that could go wrong – and, if they do, it’s your responsibility to make sure the problem is rectified and the job is finished.
Say, for example, you’re building an extension and a fire starts inside the property. As the contractor, you’d be expected to fix any 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. 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.
2. It protects your assets
Being your own boss is great – but it does mean 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 very 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.
Again, this is where a contractors’ 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.
3. It can help to secure business
Employers want peace of mind just as much as you do. If they can see you’re a reliable contractor – willing to invest in contractors’ all risk insurance, they’re much more likely to recruit you for the job.
That’s why it’s often a good idea to invest in a blanket contractors’ 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 (ultimately!) boosting your bottom line.
Is contractors’ all risk insurance the same as public liability insurance?
Quick answer? 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 very common to add on both public and employers’ liability insurance to ensure you have fully comprehensive cover.
Do you have 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 best option. This would cover you for that build and that build alone.
However, if you have multiple 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.
Contractors’ all risk insurance at 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. Just 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.