What Is Contractors All Risk Insurance

Contractors all risk insurance is a specialist type of cover designed for businesses working in the construction and building trades. It provides comprehensive protection for physical damage to building works, site materials, tools and even liability for injury or property damage while on-site.

Unlike standard public liability insurance, contractors all risk insurance is tailored to the specific risks faced during construction projects. Whether you are a builder, developer, subcontractor or principal contractor, this type of insurance can offer valuable peace of mind from the start of the project through to completion.

In this guide, we explain what contractors all risk insurance covers, who needs it, how it works and why it is often considered essential in the construction industry.

What Does Contractors All Risk Insurance Cover?

Contractors all risk insurance, sometimes called contract works insurance, covers a wide range of potential risks on a building site. The policy is designed to protect your project against unexpected events that could cause financial loss or delay.

Key areas typically covered include:

1. Contract Works
Protects the actual work being carried out on-site. For example, if a partially completed building is damaged by fire, flood, storm or vandalism, the policy would pay to reinstate the work.

2. Tools and Equipment
Covers tools, plant and machinery that you own or hire for the job. This can include hand tools, power tools, generators, scaffolding and other equipment.

3. Site Materials
Protects building materials stored on site against theft, fire or accidental damage before they are installed.

4. Hired-in Plant
Provides cover for plant or machinery hired from another company. Many hire agreements make you responsible for any damage or loss, so this is an important feature.

5. Public Liability (optional or included)
Covers claims from third parties for injury or property damage caused by your work. Some policies include this automatically, while others offer it as an add-on.

6. Employee Liability (if required)
If you have staff or labour-only subcontractors, employers’ liability insurance is legally required and can sometimes be included in the same policy.

Not all policies include every element by default. It’s important to check the policy wording and add any extras you need.

Who Needs Contractors All Risk Insurance?

This type of insurance is commonly taken out by:

• General builders

• Property developers

• Groundworkers

• Electricians and plumbers

• Renovation and refurbishment contractors

• Main contractors managing multiple trades

• Companies working under JCT or similar building contracts

Even self-employed tradespeople may need this cover, especially if they are working on large or long-term projects where they are contractually responsible for the build until handover.

In many cases, clients or developers will require contractors to have contractors all risk insurance as a condition of the contract.

Why Is It Important?

Construction sites are full of risks that can quickly lead to expensive problems. Damage caused by storms, theft of materials, fire during renovations or accidental destruction of neighbouring property can all result in major costs.

Without contractors all risk insurance, these losses would need to be covered by you or your business, which could seriously affect your profit margin or even stop work altogether.

Contractors all risk insurance:

• Protects your business financially

• Helps you meet client or contract requirements

• Keeps your project running if something goes wrong

• Gives confidence to clients, investors and other contractors

• Covers legal defence costs and compensation in case of liability claims

How Is It Different from Public Liability Insurance?

Public liability insurance only covers injury or damage to third parties. It does not protect the value of the project you are working on or your own tools and materials.

Contractors all risk insurance includes that protection. It insures both liability and the physical work you are carrying out.

For example:

• Public liability insurance would cover a claim if you accidentally damaged a neighbour’s fence

• Contractors all risk insurance would also cover the cost of rebuilding part of the project after a fire or vandalism

Both types of insurance are often taken together as part of a full protection package.

How Much Does It Cost?

The cost of contractors all risk insurance depends on:

• The size and value of the project

• Your annual turnover

• Type of work you do

• Number of employees or subcontractors

• Whether plant and tools are included

• The level of cover you require

Smaller policies may start from a few hundred pounds per year, while larger projects or multi-site operations may pay several thousand.

To get the best value, work with a broker who understands construction risks and can tailor a policy to your business.

Final Thoughts

Contractors all risk insurance is a vital form of protection for anyone involved in construction projects. It provides a safety net against physical damage, theft, delays and liability, helping you keep your business running smoothly when the unexpected happens.

Whether you are a sole trader taking on a home renovation or a large company managing commercial developments, having the right insurance in place ensures you can focus on the job without worrying about costly setbacks.