"All-risk" is the most misread word in the insurance dictionary: many read it as "pays for everything". Reality is more sober – and that's exactly what makes it useful. This article gives you a map: what typically falls within CAR/EAR cover, what can be added separately, and what has never been an insurable loss.
- The all-risk logic: it isn't the covered losses that are listed, but the exclusions – whatever isn't excluded is typically covered.
- Sudden, accidental loss is the essence of the genre: storm, fire, water, theft, breakage, collapse.
- Many important elements are added by extension: existing property, the maintenance period, storage and transit, plant and machinery.
- Liquidated damages, fines, wear and tear, and redoing your own defective work are not insurable losses.
What's typically included
The property section covers the works under construction against sudden loss: natural-catastrophe events (storm, cloudburst, lightning), fire and explosion, water from pipes, theft and malicious damage subject to the security expectations being met, and structural loss – collapse and falling-in. The liability section covers property damage and bodily injury caused to third parties. The exact scope varies by insurer – in a comparison, this is the first thing to check, not the premium.
What can be added – and is worth adding
CAR/EAR is modular: the nature of the project decides which extensions are needed. The most common are: existing property (for extensions and renovations), the maintenance period (after handover), storage and transit (transport away from the site), construction plant, and testing and commissioning within EAR. These aren't decoration: a missing extension tops the list of typical inception mistakes.
What has never been an insurable loss
There's a group that no endorsement will ever bring in, because it isn't a sudden loss but a business or quality risk: liquidated damages and fines, a delay to the schedule on its own, wear and tear, stock shortages, and the cost of redoing your own defective work. The line is fine here: redoing the defective part itself isn't covered, but the consequential loss arising from the defect – for example, an otherwise sound floor slab damaged by water ingress from a badly made pipe joint – typically is. Full list: exclusions map; design defects are their own genre, covered here.
How should you read this as a buyer?
With three questions: what's the largest realistic loss on this project? Is it within the base cover, or does it need an extension? And what does the insurer expect in return (security, protective measures, documentation)? Anyone who reads it this way gets exactly what all-risk is meant to deliver: broad but predictable protection. For the practical read-through: the policy-reading quick guide.
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