What is Contractors All Risk Insurance?
Contractors All Risk Insurance is a package product that covers a wide variety of risks for contractors. It usually includes Liabilities, Tools, Contract Works, and Plant under one convenient package. As the name implies, it gears towards contractors. You will want to read on if you’re a Tradesman, Builder, Electrician or alike!
Who needs Contractors All Risk Insurance?
Any business involved in ongoing construction contracts could benefit from Contractors All Risk Insurance. We strongly recommend that you consider a Contractors All Risk package if your business is involved in ‘contracting’. It appeals to all sorts of trades from Electricians to Groundworkers. If you’re unsure if this is the correct fit for your business, our team would be happy to help.
What insurance should I have as a contractor?
If you currently have Liability cover only, we strongly suggest that you look at a package. Whilst Liability-only cover is better than no cover at all, you leave yourself and your business greatly exposed. You will need to consider covering areas such as Tools, Plant, Liabilities, Goods In Transit, Contract Works and more. You know your business better than anyone. A good broker will be able to guide you through the potential risks and tailor a package to suit. With every business being different from the last, a tailored quotation comes highly recommended. One size does not always fit all.
What is the difference between Public Liability Insurance and Contractors All Risk Insurance?
Public Liability covers you for third-party property damage, injury, and death alone. However, it will not cover you for your employees, your own tools, labour, or materials. On the other hand, a Contractors All Risk package is likely to include Public Liability as well as Employers’ Liability. Additionally, it extends to cover the ongoing structures and labour costs associated with it should a claim arise. This is often referred to as Contract Works Insurance. Moreover, it can also cover your own plant and equipment, hired-in plant, and employee tools. It’s important to consider that relying on a standalone package for just Public Liability, for example, could greatly expose you and your business. Consequently, Contractors All Risk Insurance widens your cover and reduces the risk of not being covered.
For example, Public Liability could cover you if you dropped your tools in a client’s house and damaged their flooring. It may cover you if by some misfortune your tools fell off a window ledge and injured an innocent passer-by.
However, if your tools fall from a ledge, fortunately, do not hit anyone but do become damaged and unusable Contractors All Risk Insurance could cover the replacement costs for you. As a contractor your tools will be your bread and butter and the lifeblood of your business, why take a gamble on not having this covered?
Similarly, if you bump a piece of plant such as a mini digger into a building Public Liability could look to cover the damage to the property caused by this. It will not, however, cover any damage the digger itself has sustained. Whereas, assuming plant has been properly declared within your schedule, Contractors All Risk insurance may cover this for you. With some plant being in the tens of thousands of pounds to replace, having the correct cover in force is a no-brainer.
What is Contract Works Insurance?
Contract Works Insurance provides cover for ongoing projects. For example, if you’re a Builder with a half-constructed building that becomes damaged or destroyed, Contract Works Insurance could pick up the cost to replace your materials and labour. Which, depending on how close to completion the contract is, could be a sizeable sum.
It differs from Public Liability which generally only protects you from damage to third-party property or injury and in extreme cases, death to the public. For example, if you leave a toolbox on the path while unloading your van and a member of the public trips over it causing injury and decides to seek a claim against you, your Public Liability Insurance could cover this for you.
Whereas, if you were a Builder working on an extension, and a flood broke out causing damage to the extension you were still building, Contract Works Insurance could cover your materials, tools, and labour costs.
Is Contract Works Insurance the same as Contractors All Risk?
Whilst Contractors All Risk Insurance will often cover Contract Works, the two are not entirely the same. Contract Works would only cover damage to materials on ongoing projects and would not cover pre-existing buildings. For example, if a fire broke out whilst you were still erecting an extension, Contract Works would cover the materials and tools used for the extension. However, this does not cover the building that it is attached to. Contractors All Risk on the other hand incorporates Public Liability Insurance which could potentially cover the third-party damage to the building. This is dependent of course, on the proximate cause of the claim, and the cover within your package.
What is not covered under Contractors All Risk insurance?
Contractors All Risk Insurance does not cover you for any motor risks such as your Van Insurance, or any road registered plant whilst in use on the road as a vehicle. Other limitations may apply within the policy, such as the use of forcible entry must have occurred to cover plant theft claims. Cover will vary from insurer to insurer and can often be tailored. So, it is best to review your schedule and discuss with your broker the levels of cover your specific policy carries.
Can I include cover for my plant under Contractors All Risk Insurance?
Yes! Many packages include sections of cover for both owned plant and any hired-in plant. You can also usually extend the cover to include tools. Thieves stole nearly £17.5m worth of tools in London alone in 2020, making the risks high.
Will it cover any sub-contractors I decide to use?
This depends on what type of contractors you are referring to. If they are bonafide subcontractors, meaning they have their own business, insurance, tools and work independent of you without your instruction then no. They would need to cover any damages caused under their own policy. This is why you will often see endorsements on policies that require you to ensure any bonafide subcontractors you use have the same level of cover as you as a minimum. However, if you are using labour-only sub-contractors who follow your instruction, may use your tools, and in effect work for you albeit not necessarily under your PAYE then yes. Contractors All Risk Insurance can cover this provided you disclose dull details and include Employer’s Liability.