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CAR. CONTRACTORS’ ALL RISKS INSURANCE Rohana Alagiyage. Part I – Basic Policy Form Part II – Standstill Insurance. CAR Vs EAR. EAR- Erection All Risk Determining factor- Value of Erection & Installation works Less than 50% - CAR Above 50% - EAR. SUBJECT MATTER INSURED.
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CAR CONTRACTORS’ ALL RISKS INSURANCE Rohana Alagiyage
Part I – Basic Policy Form Part II – Standstill Insurance
CAR Vs EAR EAR- Erection All Risk Determining factor- Value of Erection & Installation works Less than 50% - CAR Above 50% - EAR
SUBJECT MATTER INSURED CAR may be taken out for all building and civil engineering projects, such as: • Residential and office buildings, hospitals, schools, theatres • Production facilities • Infrastructure facilities, airports • Bridges, dams, tunnels and harbors (wet works)
INSURED PARTIES - Jointly CAR insurance should be concluded for all parties concerned to avoid overlaps or gaps in cover: • The principal (employer) &/or • The main contractor &/or • Subcontractors &/or* • Project managers &/or • Suppliers, if any*. * Un-named
SCOPE OF COVER – Two Sections SECTION 1- Material Damage to: • Contract works (permanent and temporary works forming part of the contract) • Removable of debris • Professional Fees • Free issue materials • Construction Equipment ( Site offices, storage sheds, silos, scaffolding, utilities etc) • Construction machinery (earthmoving equipment, cranes, site vehicles) • Principal’s existing property SECTION 2 - Third party liability: • Bodily injury & Property Damage
SECTION 1- Material Damage Cover on ALL RISK basis against unforeseen and sudden physical loss or damage to the insured property from ANY cause other than those specifically excluded
SECTION 2 Where the Insured becomes legally liable to pay as damages consequent upon : • Accidental bodily injury to third parties • Accidental loss or damages to property owned by third party. Occurring in direct connection with construction works insured under Section 1
SCOPE OF COVER - Cont General Exclusions: • Political risks, war or warlike operations, SRCC • Nuclear, radioactive contamination • Willful act or willful negligence of the insured or their representatives • Cessation of work whether total or partial
SCOPE OF COVER - Cont Special Exclusions to section I: • Consequential loss of any kind • Faulty design • Defective material / workmanship (faulty part only) • Mechanical and/or electrical breakdown • Wear and tear, corrosion, gradual deterioration • Road vehicles, waterborne vessels and air crafts • Inventory losses
SCOPE OF COVER - Cont Special Exclusions to section II: • Property insured or insurable under Section I • Vibration, removal, weakening of support • Liability for bodily injury to employee/ workmen of insured parties • Liability for damage to property belonging to insured parties • Motor , Marine & Aviation liability • Contractual liability
PERIOD OF COVER Cover ATTACHES from • the commencement of work or • after the insured items have been unloaded at site or • the inception date as specified in the policy Whichever is later And TERMINATES when • the completed structure is taken over or • put into service or • the expiry date specified in the policy Whichever is earlier
CALCULATION OF SUM INSURED • SI must be equal to the amount stated in the building contract plus a value of any free issue material Contractually, insured contractor may be required (e.g. Under FIDIC contracts) to include 15% of CV towards costs of rectification, removal of debris and professional fees Separate sums insured for: • Construction machinery and construction plant and equipment (equal to NRV) • Existing property and clearance of debris (Loss limits) • Third party liability – Section II (as per contact conditions)
PRINCIPLE EXTENSIONS TO BASIC CAR COVER Section I: • Strike, Riot and Civil Commotion • Maintenance Visits Vs Extended maintenance • Expediting Expenses • Airfreight expenses • Offsite Storage • Inland Transit • Designer’s Risk • Contracts works taken over or put into service
PRINCIPLE EXTENSIONS TO BASIC CAR COVER Section II: • Cross Liability • TPL cover during maintenance period • Vibration, removal or weakening of support