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CAR/EAR Insurance: Deep Analytical Guide

Construction and Erection All Risks Insurance

What CAR/EAR really covers, what it excludes, how DSU/ALOP works, and how to structure limits, deductibles, and claims-ready wording
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Four construction insurance cases and the programme decisions behind them

These cases show how CAR/EAR protection performs when engineering damage, delay, liability and contractual obligations interact. Each case follows the same practical sequence: client situation, insurance problem, Kompetenz response and programme result.

Case 01

Coastal bridge infrastructure project

A multi-lane bridge project was exposed to typhoon, seismic and marine construction hazards. Severe weather damaged temporary works and specialised drilling equipment, while replacement logistics threatened the critical path.

Insurance problem

Temporary works, marine equipment, transit, debris removal and DSU depended on different definitions and sublimits.

Kompetenz response

We rebuilt the accumulation map, aligned marine and CAR interests, validated the critical path and negotiated weather, transit and delay provisions.

Programme result

The owner gained coordinated material-damage and delay protection with documented schedule evidence and emergency procurement authority.

Case 02

Greenfield refinery erection and commissioning

An industrial project entered testing with complex rotating equipment, process units and imported components. A commissioning failure could damage several connected systems and postpone commercial operation.

Insurance problem

Testing clauses, defects treatment, serial-loss risk, vendor warranties and DSU did not follow one consistent trigger.

Kompetenz response

We mapped commissioning stages, negotiated testing and defects language, clarified warranty interfaces and modelled the revenue effect of delayed start-up.

Programme result

The programme reflected actual testing severity, critical spares, expert-response requirements and the financing impact of delay.

Case 03

Urban high-rise modernisation

Deep renovation works took place beside occupied property and active public infrastructure. Vibration, water escape and structural intervention created a combined works and third-party liability exposure.

Insurance problem

Existing property, neighbouring buildings, vibration liability, access restrictions and professional responsibilities were divided across contracts.

Kompetenz response

We coordinated CAR, liability and professional covers, documented pre-construction surveys and negotiated cross-liability and existing-property treatment.

Programme result

The client gained a single notification route, stronger neighbour evidence and clearer allocation between contractors and insurers.

Case 04

Data-centre expansion with live operations

A phased expansion was constructed beside operating server halls. Electrical testing, cooling integration and utility switching could interrupt existing revenue services even without major structural damage.

Insurance problem

The project policy did not fully address existing operations, utility dependency, testing accumulation and non-damage service interruption.

Kompetenz response

We separated project works from operational property, mapped switching procedures, agreed testing protocols and coordinated BI and DSU assumptions.

Programme result

The placement provided clearer boundaries, escalation procedures and financial modelling for damage affecting construction and live services together.

Lessons across the four cases

The cases demonstrate that project insurance cannot be designed from cost alone. Temporary works, testing, existing property, adjacent operations, specialist equipment and the critical path require explicit treatment. The broker must connect the engineering schedule to the insurance schedule and preserve the assumptions behind limits, deductibles and DSU values.

Claims performance also depends on governance. Project teams need authority to mitigate loss, preserve damaged property, appoint experts and record schedule changes without compromising insurer consent. Kompetenz prepares this framework at placement so the policy can support recovery rather than slow it.

Claims evidence across the four cases

Every case required a different technical response, but the evidence architecture was consistent. The project team needed a controlled chronology, current schedule, photographs, engineering reports, procurement records, invoices, mitigation approvals and a clear explanation of how physical damage affected completion. For DSU, the record also had to separate insured delay from pre-existing slippage and show how the event changed the critical path.

Kompetenz aligned this evidence with policy duties before loss. The client knew which insurer consents were required, who could appoint experts, how damaged property should be preserved and which cost codes would distinguish reinstatement, acceleration and ordinary project expenditure. That governance accelerated decisions and gave management a reliable basis for interim-payment discussions.

Commercial value of the case approach

Comparing cases helped management see that the cheapest programme would not necessarily protect the most important project outcome. In each situation the decisive feature was different: temporary works, testing, adjacent property or live operations. A project-specific design allowed limits and deductibles to follow severity, while the underwriting submission explained the controls that reduced uncertainty for insurers.

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