Most construction contracts in Malaysia require insurance before work can begin — but "having a CAR policy" and "having the right CAR policy for this specific project" are two different things. Here's what to check before the project starts, not after.
What Contractors' All Risks insurance actually covers
Contractors' All Risks (CAR) insurance covers physical loss or damage to the works, materials and site equipment during construction — and usually includes a third-party liability section for injury or property damage caused by the works. What's included under each section, and at what limit, depends entirely on how the policy is structured for that specific project.
What to check before the project starts
- Contract value alignment. The sum insured should reflect the full contract value, including materials and any client-supplied items you're responsible for on site — underinsurance here reduces claim payouts proportionally.
- Project period match. The policy period should cover the full construction period plus any agreed maintenance/defects liability period afterward, not just the build phase.
- Named parties. Whether subcontractors, the employer, and any consultants are named as joint insureds where the contract requires it.
- Third-party liability limit. Whether the liability limit matches what the main contract or tender documents actually require — this is a common point of mismatch.
- Existing structures clause. If the project involves work on or near an existing building, whether damage to that existing structure is covered or excluded.
Site-specific risks worth flagging to your broker
| Site condition | Why it's worth flagging |
|---|---|
| Piling or deep excavation work | Higher risk of subsidence or damage to neighbouring structures — some policies need this specifically noted. |
| Work near live utilities or existing occupied buildings | Third-party liability exposure is meaningfully higher and worth confirming the limit is adequate. |
| Flood-prone or coastal sites | Natural catastrophe cover terms vary significantly between insurers. |
| Multiple subcontractors on site | Worth confirming which parties are actually named as insureds under the policy. |
Starting a new project?
Tell us your contract value, project type and insurance requirements
We'll check whether a CAR policy structured around those details actually matches what your contract or tender documents require.
Request a CAR Coverage ReviewFrequently asked questions
Does CAR insurance cover the contractor's own tools and machinery?
Not automatically — plant and machinery are often covered under a separate section or a separate policy entirely. Worth confirming explicitly rather than assuming it's bundled in.
Who is usually required to arrange CAR insurance — the contractor or the employer?
This is set out in the construction contract itself, and varies by project. It's worth confirming this early, since arranging cover late can delay the start of works if the contract requires proof of insurance before mobilisation.