Builder's Risk and CAR: the One Policy You Cannot Skip
Construction All Risk (CAR), also called Builder's Risk in some markets, is the policy that protects the project itself from physical loss or damage during the construction period — fire, flood, collapse, storm, theft of materials in situ. Every well-run project, whether a single-villa self-build or a fifty-storey tower, needs it. Premiums, deductibles and exclusions vary by insurer and project, so compare them on the actual policy wording rather than a broker summary. If the project is financed, check the loan agreement's insurance covenants; if it is self-financed, the owner should require CAR cover of themselves.
Third-Party Liability and Employee Cover: the Two That Follow the People
A project does not just construct a building; it puts workers, neighbours, and passers-by into contact with a live construction site. Third-party liability covers injury or property damage to anyone who is not a worker on the project, while employees' compensation and Employees' State Insurance (ESIC) cover the workers themselves. Since 21 November 2025 this area is governed by the Code on Social Security, 2020, one of four labour codes that together replaced 29 earlier laws; the government's summary says ESIC coverage now extends pan-India, voluntary for establishments with fewer than 10 employees and mandatory for any establishment with even one employee engaged in hazardous processes.[1]Check both covers at the start of every contract rather than only at the start of the project: a subcontractor who arrives on site without valid employee cover can quickly become the principal contractor's problem.
The Optional Policies That Look Important and Usually Are Not
Project owners are routinely sold professional indemnity cover on the design team, delay-in-startup cover, and environmental liability cover on top of the three core policies. Some of these have a real place — a large public-private partnership with tight revenue milestones genuinely needs delay-in-startup cover — but for the average Indian project owner the marginal premium buys protection against scenarios that are already addressed by the CAR, the contract conditions, or the contractor's own policies. The right time to discuss the optional policies is after the three core ones are confirmed in writing, with a clear broker explanation of what scenario each one is meant to cover, and what the project would do if the scenario actually occurred.
Sources
- Government Makes the Four Labour Codes effective to Simplify and Streamline Labour Laws (21 November 2025) — Press Information Bureau, Ministry of Labour & Employment
- What it says:
- The Code on Wages 2019, Industrial Relations Code 2020, Code on Social Security 2020 and Occupational Safety, Health and Working Conditions Code 2020 are effective from 21 November 2025, rationalising 29 existing labour laws; ESIC coverage extended pan-India, voluntary for establishments with fewer than 10 employees and mandatory for establishments with even one employee in hazardous processes.
- Rights:
- Government of India publication; cited and paraphrased, not reproduced
- Retrieved:
- 2026-09-23