Building Contractor Insurance Scope Coverage and Exclusions

Building Contractor Insurance- Scope, Coverage and Exclusions


"Building Contractor Insurance or Contractors All Risks Policy is a comprehensive insurance which provides complete protection against all types of civil construction risks.


Coverage: All types of civil engineering works, ranging from small buildings to massive dams are exposed to damage from a wide range of causes such as fire, lightning, flood, inundation, storm, cyclone and other accidental damages.


Scope: It is an all risks insurance policy covering loss or damage to the property by any cause other than those excluded. In particular the cover includes-

- Fire, lightning, explosion, aircraft damage

- Riot, strike, malicious act

- Flood, inundation, storm, cyclone and allied perils

- Landslide, subsidence and rockslide

- Burglary and theft

- Faults in erection

- Human errors, negligence

- Short circuiting, arcing, excess voltage

- Electrical and mechanical breakdown

- Collapse, damage due to foreign objects, impact damages



Extensions Cover: Extensions Cover can be extended to include up to a limit chosen by you on the following on payment of additional premium-

- Third Party liability

- Cross liability

- Earthquake

- Cost of removal of debris

- Express freight, overtime charges

- Air freight

- Additional customs duty

- Escalation

- Owner's surrounding property

- Storage risk at Fabricator's Premises

- Breakage of glasses

- Maintenance cover-Visits, Extended maintenance

- Cost of tools and tackles and material handling equipment used for construction purposes


Exclusions: Some of the exclusions under the policy are-

- War Invasion

- Nuclear Reaction Nuclear Radiation or Radioactive Contamination

- Insured's Contribution Deductible

- Willful Act or Willful Negligence of the Insured

- Cessation of Work

- Defective Material or Bad workmanship

- Wear Tear Corrosion Oxidation Deterioration

- Normal Maintenance or Making Good

- Disappearance or Shortage Inventory Losses

- Faulty design

- Loss of files, drawings, cash, cheques etc

- Consequential Loss

- Terrorism


Excess Deductible: It is standard to apply excess to claims as neither the client nor the insurer wishes to be troubled with handling small losses. To comply with a client's wishes e.g. contract conditions, financial policy or risk management programme, higher excess may be applied, with a suitable reduction in premium.


Going beyond the physical damage, future earnings of a business that has been prevented from operating, due to a delay in completing a construction or erection contract, could be protected by Advance Loss of Profit insurance.

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