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CARI

Contractor’s All Risk Insurance for construction projects in the Philippines
Insurance Guide Philippines, CARI

Contractor’s All Risk Insurance (CARI) in the Philippines: Complete Guide

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Construction projects involve significant investments in materials, equipment, labor, and other resources. Even with proper planning and safety measures, unexpected events can cause physical damage, delays, and financial losses during construction. Contractor’s All Risk Insurance (CARI) is designed to provide protection against certain risks associated with construction projects. It can help contractors and project stakeholders manage the financial impact of covered losses that occur during the construction period. This guide explains what CARI is, what it generally covers, common exclusions, requirements, factors affecting the premium, and how contractors can prepare for a CARI quotation in the Philippines. What Is Contractor’s All Risk Insurance? Contractor’s All Risk Insurance, commonly known as CARI, is a type of construction insurance designed to cover certain accidental physical loss or damage arising in connection with an insured construction project. Depending on the policy terms, CARI may provide coverage for the contract works, construction materials, temporary works, and certain construction equipment. It may also include third-party liability coverage for certain claims arising from the construction project. The exact protection depends on the policy wording, declared project details, limits, deductibles, extensions, and exclusions. CARI is generally arranged for a specific construction project and is intended to remain in force during the applicable construction period stated in the policy. What Does CARI Cover? CARI coverage varies according to the policy, but construction projects may commonly involve protection for areas such as: 1. Contract Works The main section of CARI typically concerns the physical construction works being undertaken. Depending on the policy, this may include buildings, structures, civil works, and other portions of the project that are included in the insured contract. 2. Construction Materials Materials intended to become part of the completed project may be covered when they suffer covered physical loss or damage during the insured period. Examples may include: 3. Temporary Works Certain temporary structures and works required for construction may also be included, subject to the policy terms. Examples can include temporary supports, site structures, and other temporary works associated with the project. 4. Construction Equipment Construction equipment and machinery used for the project may be covered when specifically included and subject to the applicable policy conditions. The treatment of equipment can vary depending on whether it is owned, rented, leased, or otherwise used by the contractor. 5. Debris Removal Some CARI policies may provide coverage for debris removal following covered physical damage. The applicable limit and conditions should be reviewed before relying on this coverage. 6. Third-Party Liability CARI may also include a third-party liability section, depending on the policy arrangement. This can address certain covered claims involving third parties arising from the construction project, subject to the policy’s terms, conditions, limits, and exclusions. For a more detailed explanation, read our guide on what CARI covers. What Does CARI Not Cover? The term “All Risk” does not mean that every possible loss is automatically covered. CARI policies contain exclusions, conditions, deductibles, and other limitations. Depending on the policy wording, common exclusions or limitations may involve: The actual exclusions vary by policy. Contractors should review the policy wording and discuss project-specific risks with their insurance provider before purchasing coverage. Who Needs CARI? CARI may be relevant to businesses and parties involved in construction projects, particularly where the project involves significant construction values or contractual insurance requirements. Potential users may include: Some construction contracts may require the contractor to maintain specific insurance coverage for the duration of the project. Whether CARI is appropriate depends on the nature, size, contract requirements, and risks of the particular project. What Construction Projects Can CARI Apply To? CARI may be arranged for different types of construction and engineering projects. Examples can include: The suitability of coverage depends on the project’s characteristics and the insurer’s underwriting requirements. CARI Requirements in the Philippines When applying for a CARI quotation, insurers generally need information about the construction project to assess the risks involved. Commonly requested information may include: Additional documents may be requested depending on the project and underwriting requirements. For a detailed checklist, read our CARI Requirements in the Philippines guide. How Much Does CARI Cost? There is no single fixed price for CARI because the premium depends on the characteristics and risk profile of the project. Factors that may affect the premium include: A proper quotation requires project-specific information so that the insurer can evaluate the risk and determine the applicable premium. CARI vs. CGL: What Is the Difference? CARI and Commercial General Liability (CGL) can both be relevant to construction businesses, but they address different areas of risk. CARI primarily focuses on certain physical loss or damage connected with the insured construction project. CGL primarily addresses certain third-party liability claims arising from covered business activities. For example, a construction project may experience accidental physical damage to covered contract works. This is the type of risk CARI is designed to address, subject to the policy. A separate situation could involve a third party claiming damages because of an incident connected with the contractor’s operations. This may fall under CGL, depending on the circumstances and policy terms. For a detailed comparison, read our article on CARI vs. CGL. Can a Construction Project Have Both CARI and CGL? Yes, a construction business or project may have both types of coverage because they address different exposures. Having one does not automatically mean that the risks addressed by the other are covered. The appropriate combination depends on the project’s contract requirements, operations, risk exposures, and insurance arrangements. Contractors should review the specific coverage provided under each policy rather than assuming that one policy covers every construction-related risk. CARI Deductibles A deductible is the amount that may be borne by the insured before the insurer pays an eligible claim, subject to the policy terms. CARI policies can contain different deductibles depending on the type of loss or the particular risk. For example, a policy may apply different deductibles to certain natural catastrophe risks or other specified losses. The deductible should be reviewed carefully when comparing

CARI vs CGL for construction projects in the Philippines
Insurance Guide Philippines, CARI, CGL

CARI vs. CGL: Understanding the Difference in Construction Insurance

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Construction projects involve different types of risks. A project may face the possibility of damage to the works being constructed, while construction activities can also result in accidental injury to third parties or damage to their property. Because these risks are different, contractors and project owners may encounter different types of insurance requirements. Two types of coverage that may be relevant to construction projects are Contractor’s All Risk Insurance (CARI) and Commercial General Liability (CGL) Insurance. Although both can provide protection against risks associated with business and construction activities, CARI and CGL serve different purposes. Understanding the difference can help contractors and project owners determine what types of insurance may be relevant to their project. What Is CARI? Contractor’s All Risk Insurance (CARI) is designed to provide protection against covered physical loss or damage associated with an insured construction project during the construction period. It is commonly used for projects such as: Depending on the policy, CARI may cover areas such as contract works, construction materials, temporary works, and certain construction equipment. CARI may also include third-party liability coverage, depending on the policy structure. For a more detailed explanation, read our Contractor’s All Risk Insurance guide. What Is CGL? Commercial General Liability (CGL) Insurance is designed to provide protection against certain third-party liability claims arising from the insured business’s operations. For businesses involved in construction, third-party risks may include accidental bodily injury or property damage arising from covered business activities. For example, a construction operation could accidentally cause damage to a neighboring property or result in injury to a third party. If the incident falls within the policy’s coverage, CGL may respond to the covered liability claim, subject to the policy’s terms, conditions, limits, and exclusions. CGL is not limited to construction businesses. It can also be relevant to many other businesses that face third-party liability exposures. CARI vs CGL: What Is the Main Difference? The simplest way to understand the distinction is to look at what type of risk the insurance is primarily designed to address. CARI CARI primarily focuses on covered physical loss or damage to the construction project and insured property. CGL CGL primarily focuses on covered third-party liability arising from business operations. In simple terms: CARI → Protection for covered construction project damage CGL → Protection against covered third-party liability The actual coverage depends on the specific policy wording, limits, conditions, deductibles, and exclusions. CARI vs CGL: Key Differences Feature CARI CGL Main purpose Covers certain physical loss or damage to insured construction works Covers certain third-party liability claims Primary focus Construction project and insured property Third-party bodily injury or property damage Common users Contractors and construction project parties Businesses across various industries Construction period Generally applies during the insured construction period Depends on the policy and business operations Property damage to project May be covered, subject to policy terms Generally not the primary purpose of the coverage Third-party liability May be included Primary focus of the coverage Coverage limits Based on the insured project and policy Based on the liability limits selected This table provides a general comparison. The actual coverage provided by any policy depends on its specific terms and conditions. What Does CARI Cover? Depending on the policy, CARI may provide protection for covered physical loss or damage involving areas such as: Contract Works The construction works being carried out as part of the insured project may be covered against covered physical loss or damage. Construction Materials Materials intended for incorporation into the project may be covered, subject to the policy. Temporary Works Certain temporary works associated with the construction project may be included. Construction Equipment Certain equipment used in connection with the project may be covered depending on the policy arrangement. The exact property insured and applicable limits should always be confirmed with the insurance provider. What Does CGL Cover? CGL primarily addresses certain liability exposures involving third parties. Depending on the policy, this may include covered claims involving: Third-Party Bodily Injury A third party may suffer bodily injury arising from a covered business operation. Third-Party Property Damage A business operation may accidentally cause damage to property belonging to another party. Legal Liability Where applicable under the policy, CGL may respond to covered legal liability claims arising from insured business operations. CGL does not mean that every type of liability is covered. Specific exclusions and conditions apply. Can a Construction Project Need Both CARI and CGL? Yes, a construction project may require both types of coverage. This is because they address different risks. Consider a construction project where an incident damages part of the building under construction and also causes accidental damage to a neighboring property. The damage to the insured construction works and the third-party liability exposure are different risks. CARI may address the covered physical damage to the insured construction works, while CGL may address a covered third-party liability claim, depending on the circumstances and policy terms. Having one type of insurance does not automatically mean that all risks addressed by the other type are covered. Is CGL Included in CARI? CARI may include a third-party liability section, depending on the policy. However, this does not mean that CARI and CGL are automatically interchangeable. The scope, limits, conditions, and exclusions of the liability coverage under a CARI policy may differ from a standalone CGL policy. For this reason, contractors should review their project requirements and the actual policy wording rather than assuming that one policy automatically replaces another. Which One Does a Contractor Need? There is no single answer for every contractor or project. The appropriate insurance depends on factors such as: Some projects may specifically require CARI. Others may require liability coverage such as CGL, while some situations may call for both. The project contract should therefore be reviewed carefully before arranging insurance. Why Is Understanding the Difference Important? Confusing CARI and CGL can result in misunderstandings about what a policy actually protects. For example, a contractor may assume that having liability coverage automatically protects the physical construction

CARI requirements in the Philippines for construction projects
Insurance Guide Philippines, CARI

CARI Requirements in the Philippines: Documents and Coverage Guide

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Contractor’s All Risk Insurance (CARI) is an important type of protection for construction and engineering projects in the Philippines. It can provide coverage against certain losses or damage that may occur during the construction period, subject to the policy’s terms, conditions, limits, and exclusions. For contractors, project owners, and other parties involved in construction projects, one of the first questions is often: What are the CARI requirements in the Philippines? The requirements can vary depending on the project, its contract, the insurer, and the type and size of construction work involved. However, there are several documents and project details that are commonly requested when applying for CARI or requesting a quotation. What Is CARI? Contractor’s All Risk Insurance, commonly known as CARI, is designed to provide protection for construction projects against covered risks during the construction period. Depending on the policy, CARI may provide coverage for physical loss or damage involving the construction works, materials, equipment, and other insured property. It may also include third-party liability coverage, subject to the policy terms, conditions, limits, and exclusions. CARI is commonly associated with projects such as building construction, infrastructure work, renovations, and other engineering or construction activities. If you are still learning about CARI, read our Contractor’s All Risk Insurance guide for a more detailed explanation of how CARI works and what it can cover. What Are the Common CARI Requirements? There is no single checklist that applies to every construction project. The documents required can depend on the project’s scope, contract value, duration, location, construction method, and other risk factors. However, applicants may commonly be asked to provide information such as: Providing complete and accurate information can help the insurer properly evaluate the project and determine the appropriate coverage and premium. 1. Project Details One of the most important parts of a CARI application is basic information about the construction project. This may include: These details help the insurer understand the nature and duration of the risk being insured. 2. Contract or Project Value The value of the construction project is another important consideration when arranging CARI. The insurer may request the contract price or estimated project value, depending on the project and policy structure. Supporting documents may be requested to verify the amount, particularly for larger or more complex projects. It is important to provide accurate figures because the amount of insurance should appropriately reflect the project and the property or works being insured. 3. Bill of Quantities (BOQ) A Bill of Quantities (BOQ) may be requested for construction projects because it provides useful information about the work being performed and the costs associated with different parts of the project. The BOQ can help provide a clearer picture of: For projects where a BOQ is available, providing it can help the insurance provider better understand the project’s scope and requirements. 4. Notice to Proceed or Similar Project Documents A Notice to Proceed (NTP) may also be requested, particularly for projects where construction has already been authorized or is about to begin. Other project documents may also be requested depending on the circumstances. If the NTP is not yet available, the insurer may ask for other documentation that establishes the project’s status and expected construction period. 5. Project Plans and Specifications For certain construction projects, technical documents such as plans, specifications, engineering details, or other project information may be required. These documents can be particularly relevant when evaluating projects with more complex construction activities or specialized engineering work. The exact documents required will depend on the nature of the project and the insurer’s underwriting requirements. 6. Construction Period The construction period is an important consideration when arranging CARI. Applicants should provide the expected: Start date → Construction period → Completion date The policy period should correspond appropriately with the project and the coverage being requested. If there are delays or changes to the construction schedule, the insurance provider should be informed because an extension of the period of insurance may need to be arranged, subject to the policy terms. 7. Information About the Contractor Information about the contractor may also be requested as part of the underwriting process. This may include: For larger or specialized projects, additional information may be requested to help assess the construction risk. What Does CARI Cover? CARI is designed to protect against covered physical loss or damage associated with the insured construction project, subject to the policy’s terms, conditions, limits, and exclusions. Depending on the policy, coverage may include areas such as: Contract Works This generally refers to the construction works being performed as part of the insured project. Construction Materials Certain materials intended for incorporation into the project may be covered, depending on the policy. Temporary Works Temporary structures or works associated with the construction project may be covered when included within the policy terms. Construction Equipment Certain construction equipment may be covered depending on the policy and how the equipment is declared or included. Third-Party Liability CARI may also include third-party liability coverage for certain claims arising from the construction project, subject to the applicable terms and limits. It is important to remember that CARI coverage is not unlimited. Specific exclusions, deductibles, conditions, limits, and warranties may apply. Are CARI Requirements the Same for Every Project? No. This is an important point for contractors and project owners. A small building project will not necessarily have the same requirements as a large infrastructure or engineering project. Requirements can vary depending on factors such as: Because of these differences, the best approach is to provide the available project information so the insurance provider can determine what information and documentation are needed. Why Should You Prepare Your Documents Before Applying? Having your project documents ready can make the application process more efficient. For example, having your BOQ, project contract, NTP, project details, and other relevant information available can help the insurance provider understand the project more quickly. It can also reduce unnecessary back-and-forth when additional information is needed to evaluate the risk. Before requesting a CARI

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