Contractors all risks insurance cost in Singapore
Key takeaways
- The sum insured for the works is normally the full contract value. Public contracts under PSSCOC require at least the contract sum plus a percentage for professional fees.
- The rate depends on the works and the ground more than on the contractor's size.
- Third-party liability is rated separately, by limit and by the risk to neighbouring property.
- A higher excess on wet works, piling and excavation is the main lever a contractor controls.
What drives the CAR premium
No insurer, GIA or government source publishes CAR rate bands in Singapore. The table shows each driver and the direction it moves the price.
| Driver | Effect on premium |
|---|---|
| Contract value (sum insured) | Base the rate is applied to; premium rises with value |
| Type of works | Civil and underground works rate higher than fit-out or building works |
| Construction period | Longer period, higher premium |
| Maintenance (defects) period | Longer period, higher premium |
| Site and neighbours | Adjacent buildings, roads and utilities raise the liability rate |
| Third-party limit | Higher limit, higher premium |
| Excess | Higher excess, lower premium |
| Claims record | Clean 3 to 5 year record lowers the rate |
Market conditions sit on top of these drivers. GIA reported that property insurance premiums grew 4.1% to S$864.1 million in 2025, while property claims rose 60.5%. GIA attributed the rise to more fire incidents and several large losses. Claims growth of that size feeds into the rates insurers charge for material damage, including CAR.
Factors that move the price
Contract value and scope
The contract value sets the sum insured. Free-issue materials from the employer and existing structures being altered must be added if the contract makes the contractor responsible for them.
Type of works
Interior fit-out carries low fire and water risk. Building works add height, cranes and fire. Civil works add ground movement, water and collapse. Each step up raises the rate.
Ground conditions and water
Soft ground, high water tables and work near the sea increase subsidence and flood exposure. Insurers ask for soil reports on piling and excavation.
Construction and maintenance periods
The policy runs from site possession to completion, then through the defects period. A 24-month build costs more than a 12-month build of the same value.
Neighbouring property
Vibration, dewatering and removal of support can damage adjacent buildings. PSSCOC Clause 27.2 requires separate joint-names cover for this damage where the contractor is not negligent.
Third-party limit
The contract sets the minimum limit per occurrence. Raising the limit adds premium, though not in proportion.
Excess
Insurers set higher excesses for water damage, ground movement and testing. Accepting a higher excess on these perils lowers the premium.
Claims record and controls
Insurers read the contractor's loss record, safety performance and method statements. A record with repeated water-damage claims attracts a higher excess.
How PSSCOC sets the sum insured
Public-sector works use the Public Sector Standard Conditions of Contract (PSSCOC). The Construction Works form is in its 8th edition, July 2020. A PSSCOC-lite edition was issued in March 2025.
Clause 28.1 of the 2020 Construction Works form sets four rules for insuring the works:
- The contractor insures in the joint names of the employer and the contractor.
- The sum insured is not less than the contract sum in the Letter of Acceptance, plus the percentage in the Appendix for professional fees.
- Cover runs until 14 days after substantial completion, then through the defects liability period for causes arising earlier.
- Tools and construction equipment owned or hired by the contractor are excluded from the works cover.
Under Clause 28.1(4), a contractor's annual policy covering all its contracts can satisfy the requirement if the employer's interest is endorsed. Clause 28.1(3) and Clause 27.3 let the employer buy the insurance and recover the premium if the contractor defaults.
These clauses set the minimum. They do not set the price. The contractors' all risks guide explains the two sections of the policy.
Underinsurance and the average condition
A sum insured below the contract value reduces every claim, not only the large ones. The principle is set in law. Section 81 of the Marine Insurance Act 1906 sets it out. An assured insured below the insurable value is deemed their own insurer for the uninsured balance.
Most CAR wordings carry an average condition on the same principle. If the works are insured for S$8 million but valued at S$10 million, the insurer pays 80% of each loss. A S$500,000 claim becomes S$400,000, before the excess.
Variations are the usual cause. A contract that grows by 20% through variation orders leaves the original sum insured short. The contractor should declare increases in contract value to the insurer as they are approved.
Worked examples
Example 1: interior fit-out. A fit-out contractor with 30 staff takes a S$1.2 million office fit-out over 4 months. The sum insured is S$1.2 million, with a third-party limit set by the landlord. The price is moved by the short period, low fire load and the building's sprinkler system. The main risk is water damage to floors below.
Example 2: public school extension. A main contractor with 120 staff takes a S$25 million PSSCOC contract over 20 months. The sum insured is S$25 million plus the professional fees percentage in the Appendix. The price is moved by the period, the occupied school next to the site and the 12-month defects period.
Example 3: piling and basement works. A civil contractor takes a S$40 million job with bored piles and a 2-level basement beside an existing road. The sum insured is S$40 million. The price is moved by soil conditions, dewatering, the adjacent road and utilities, and the excess on ground movement. Insurers will ask for the soil report and the instrumentation plan.
Market context
BCA projected total construction demand for 2025 at S$47 billion to S$53 billion. More projects mean more CAR placements competing for the same insurer capacity on large civil works.
CAR does not cover injury to the contractor's own workers. Those claims fall under work injury compensation. For accidents from 1 November 2025, WICA medical expenses are capped at S$53,000 or 1 year. Death compensation ranges from S$91,000 to S$269,000. A contractor needs both policies in place before site possession.
Figures checked 14 November 2026.
Frequently asked questions
Is the CAR premium a percentage of contract value?
For the material damage section, yes. Insurers apply a rate to the contract value and add a separate charge for third-party liability. The rate is set per project and is not published.
Who buys CAR: developer or main contractor?
Either, depending on the contract. Under PSSCOC Clause 28.1, the contractor insures in joint names with the employer. Some private developers buy a project policy themselves and name the contractors as insured parties.
What is the maintenance period and does it cost extra?
The maintenance period, or defects liability period, follows completion. PSSCOC requires the works cover to continue through it for damage from causes before it began. A longer maintenance period adds premium.
Why is the excess higher for wet works and piling?
Water damage and ground movement produce frequent losses on those works. Insurers set a higher excess so the contractor bears the small, frequent losses. The insurer then prices only the larger ones.
Sources
General information only, not advice on any particular policy. Cover depends on the policy wording and the insurer's terms.