Category: Construction specialty · Reviewed by Chrissie Anderson, Client Executive · Last reviewed 2026-06-05
CAR insurance is the universal industry abbreviation for Contractors All Risks insurance — the project-specific cover for physical loss and damage to construction works during the construction period; the canonical full entry for the product is at /wiki/contractors-all-risks/. This entry exists to disambiguate the abbreviation, which is distinct from the consumer motor insurance product also commonly called ‘car insurance’.
Category: Construction specialty Also known as: Contractors All Risks insurance, construction all risks insurance First codified: Lloyd’s wordings from c.1960s Related legislation: Construction (Design and Management) Regulations 2015 [1]; Building Safety Act 2022 [2]; Defective Premises Act 1972 [3]
In the UK construction and insurance industries, ‘CAR’ is the universal abbreviation for Contractors All Risks insurance. The abbreviation appears in tender documents, in the JCT Design and Build and NEC contract suites, in Lloyd’s market documentation and in regulatory publications. It refers to the project-specific insurance covering physical loss of and damage to construction works during the construction period, plus liability and (under standard extensions) cover for existing structures and surrounding property [4][5].
The abbreviation should not be confused with the consumer motor insurance product also commonly called ‘car insurance’ in everyday English. In construction industry usage, ‘CAR’ always means Contractors All Risks; in consumer usage, ‘car insurance’ means motor insurance. The context invariably makes the meaning clear, but the potential for confusion is a reason to be precise in client communications [4][5].
The canonical encyclopedia entry for the product is at /wiki/contractors-all-risks/, which contains the full treatment of the cover sections, legal framework, underwriting and claims practice. This entry exists principally for readers searching for ‘CAR insurance’ and to disambiguate the abbreviation from motor insurance [4][5].
The legal and regulatory framework for CAR insurance is identical to that for Contractors All Risks insurance, set out in detail at /wiki/contractors-all-risks/. The principal elements are:
The Construction (Design and Management) Regulations 2015 set out the principal duties of clients, principal designers and principal contractors in respect of safety throughout the construction phase. The HSE is the regulator [1].
The Building Safety Act 2022 created the new building safety regime applicable to higher-risk buildings (residential buildings of 18 metres or 7 storeys or more), with extended limitation periods for defective premises claims and significantly heightened compliance obligations for higher-risk projects [2][6].
The Defective Premises Act 1972 (as amended by the Building Safety Act 2022) imposes a duty on those involved in providing a dwelling to ensure that work is done in a workmanlike or professional manner with proper materials so that the dwelling will be fit for habitation [3].
The Construction Act 1996 (Housing Grants, Construction and Regeneration Act 1996, as amended) governs construction contracts including payment and adjudication. The Act is the principal statutory framework for the contractual relationships within which CAR policies operate [7].
The Marine Insurance Act 1906 may apply to marine elements of CAR cover where the construction project involves marine works. The Insurance Act 2015 governs the duty of fair presentation and the law of warranties for non-consumer contracts including CAR placements [8][9].
The market practice for CAR insurance is described in detail at /wiki/contractors-all-risks/. In summary:
A CAR policy is arranged at the start of a construction project, normally as a condition of the principal contract. The policy covers the construction period plus an extension for the defects liability period. Premium is paid as a single sum at inception or in instalments tied to construction milestones [4][5].
The cover is typically a ‘composite’ or ‘joint names’ policy covering the employer, the contractor and (often) the subcontractors and design team. Each insured party has the rights of a named insured, preventing subrogation between them for losses falling within the cover [4][5].
Underwriting is based on contract value, type of construction, location, contractor experience, design risk and geotechnical conditions. Premium rates range from £0.05 per £100 of contract value for routine commercial building to £0.50 per £100 or more for complex civil works. Claims are handled by specialist construction loss adjusters working alongside the contractor and the employer’s project monitor [4][5].
The variations of CAR insurance — including Erection All Risks for plant erection projects, Owner Controlled Insurance Programmes (OCIP) for large-project wraps, Project-Specific Professional Indemnity for design team liability, Tunnel Construction insurance for tunnelling works, and post-construction Latent Defects Insurance — are described at /wiki/contractors-all-risks/ and at their respective dedicated entries:
A UK commercial developer is constructing a 12,000 m² mixed-use development with a contract value of £42m and a construction period of 18 months. The developer’s principal contract with the main contractor (a JCT Design and Build 2016) requires the contractor to maintain ‘CAR insurance’ in the joint names of the developer and the contractor for the full contract value plus £15m for existing structures, £15m for public liability and a 12-month defects liability period extension. The CAR policy is placed by the contractor’s broker with a London market insurer for an annual premium of approximately £58,000. The contract terminology ‘CAR insurance’ is universally understood by all parties as Contractors All Risks insurance; no further definition is required in the contract or in the supporting tender documentation. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote