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What is Contractors' All Risks Insurance?

What is covered in Contractors' All Risks Insurance?

When you buy Digit’s Contractors’ All Risks Insurance, it offers the following coverages

Material Damage

In case of any damage of property during the policy period due to any reason other than those specifically excluded will be covered up to the specified amount under the policy. The insured will be reimbursed the cost incurred for clearance and removal of debris.

Third-party liability

Digit's policy will indemnify you against any legal liability for loss of property of other persons or for fatal or non-fatal injury to any person other than your own employees


The policy will also compensate you all costs and expenses of litigation recovered by any claimant or those incurred by you with written consent from us.

Comprehensive cover

The policy offers projects comprehensive cover subject to printed exclusions in the policy. This policy is normally given to projects where value of civil construction works is more than 50% of total project value.

Add-on covers

You can get additional coverage for expenses not provided in the policy by opting for add-on covers.

What’s not Covered?

Digit's Contractors' All Risks insurance policy does not cover loss or damage to construction property arising out of cost as highlighted in policy under the head exclusions.  Some of them are mentioned below -  

Accidents caused by vehicles that ply on roads, water, and air are not covered by the policy.

The loss and damage caused due to the use of defective material, casting, and bad artistry is not covered.

The policy does not entertain claims for damage caused due to normal wear and tear or because of negligence.

The policy does not cover the costs of any alterations, additions, or improvements made as part of regular maintenance of the building.

Damage caused to the building due to faulty design, terrorism, war and nuclear perils does not exist in the policy.

Loss or damage of files, drawings, accounts, and bills, as well as contractual liabilities and third-party liability, is not covered in the Contractors' All Risks Insurance policy.

Loss due to faulty design and those discovered only at the time of taking an inventory is not covered.

Amount of loss falling under the policy excess as highlighted in policy.

How to file a claim?

Who needs Contractors' All Risks Insurance?

The insurance policy can be availed of by those involved in the construction business in any way.

Construction companies

Companies involved in the construction business can buy the policy to protect themselves financially during untoward circumstances.

Finance companies

The Contractors' All Risk policy can also be bought by companies that provide financial support to finance the entire project. It helps if some untoward incidents occur during the construction phase or afterwards.

Property owners

The property owner can buy the policy where the construction is happening as they are the ones who have given the task of completing the building to the contractor. 

Contractors and subcontractors

With contractors and subcontractors employing workers to perform specific tasks concerning the completion of construction on time can also buy the policy.

Why do you need to buy the Contractors' All Risks Insurance policy?

How is the premium calculated for Contractors' All Risks insurance?

The premium payable for Contractors’ All Risks Insurance policy is calculated using various factors like:

Sum insured

If you select a higher sum insured, the payable premium will be high and vice versa. The sum insured must be fixed based on estimated completed value of the project. You must know that pre-operative charges are not part of the sum insured. 50% of escalation amount opted must also be added to arrive at policy sum insured.

Work performed

The premium varies depending on the work performed. The greater the risk associated with the work performed on the project site, the higher the payable premium.

Safety standards

The safety standards also impact on the Contractor's All Risk policy premium. Ensuring that proper precautions are taken for the work done at the worksite will bring down the premium required to be paid.


The project's location also impacts the policy's premium as some areas are more prone to natural disasters.

How to choose the right Contractors' All Risks insurance?

Get the right sum insured

When deciding to get yourself a Constructors' All Risks policy, make sure to select sum insured adequately failing with you will be penalized for under insurance at the time of claim. 

Ensure you get proper coverage

While deciding which Contractors’ All Risks policy to avail, ensure that you get adequate coverage by going through the terms and conditions properly. It is crucial to help you claim if some unforeseen circumstances arise.

Select an insurer with a hassle-free claim process

Irrespective of any insurance policy you buy, ensuring that the claims process is hassle-free. Because claims are the most crucial part of insurance, select a constructors' all risks policy from an insurer with an easy claim settlement policy.

Pick one which offers extra benefits

In addition to the pointers mentioned above, make sure to look for additional help when buying the insurance policy. It can include easy-to-use mobile apps, round-the-clock assistance, etc. 

Compare policies offered by other insurers

You need to compare policies offered by other insurers in the market, it will enable you to get yourself a policy that offers you adequate coverage.

FAQs about Contractors All Risks Insurance in India