Contractors All Risks and Erection All Risks in Singapore: What the Cover Is, and What a Public Sector Contract Requires

The Answer in 60 Seconds

A contractors all risks (CAR) policy has two sections: the first insures the contract works themselves, with the plant, equipment and materials on site, against unforeseen and sudden physical loss or damage from any cause not excluded; the second insures the contractor's legal liability to third parties for bodily injury or property damage in connection with the contract. Erection all risks (EAR) is the same two-section structure for machinery, plant and equipment through erection, testing and commissioning. No Singapore statute requires either policy. The construction contract does.

For public sector work the contract is the Public Sector Standard Conditions of Contract for Construction Works 2020, Eighth Edition, July 2020, published by BCA. It carries two insurance clauses: clause 27, Insurance for Personal Injury, Work Injury Compensation and Property Damage, and clause 28, Insurance of the Works. Clause 27.1 requires the contractor, before commencement, to maintain personal injury liability insurance, the Work Injury Compensation Act approved policy and property damage insurance for the limits the Appendix sets, with the Employer noted as Principal or as an Additional Insured with cross liability. Clause 27.2 requires a separate policy in the joint names of the Employer and Contractor, for the amounts of indemnity the Specifications or other Contract documents specify, against property damage caused by collapse, subsidence, vibration, weakening or removal of support or lowering of ground water where the contractor is not negligent. The standard form sets the structure and, for the works, the floor: not less than the Contract Sum plus the Appendix percentage for professional fees. The liability limits and the clause 27.2 amounts are set per tender in the Appendix, the Specifications and the Particular Conditions.

The Sourced Detail

What a CAR policy insures: section 1, the works

The first section of a contractors all risks policy is material damage: the insurer indemnifies the insured if, during the period of cover, the items entered in the schedule suffer unforeseen and sudden physical loss or damage from any cause other than those specifically excluded. The items are the contract works, the plant and equipment on site and the materials on site, each for the sum set against it in the schedule; a Singapore insurer describes the same section as loss or damage to the contract works. That is what all-risks means: the policy responds to physical loss or damage from any cause not excluded, rather than to a list of named perils. Under a public sector contract the period is the contract's, not the wording's: PSSCOC clause 28.1 keeps the works insured until 14 days after the Date of Substantial Completion and, for damage from a cause arising before it began, through the Defects Liability Period. Which of those items is in, and for what sum, is read from the policy schedule and the wording, not from a general description.

Section 2, third-party liability during the works

Section 2 insures the sums the contractor becomes legally liable to pay as compensation for bodily injury or property damage happening within the immediate vicinity of the project, caused by an occurrence in connection with the contract; the same wording carries the law costs and expenses of defending the suit. The liability itself comes from the common law of negligence and, for anyone who comes onto the site, from the occupier's duty of care that the Court of Appeal set in See Toh Siew Kee v Ho Ah Lam Ferrocement; the policy funds that liability, it does not create it. On a workplace the same duty is statutory: section 12(2) of the Workplace Safety and Health Act 2006 states the duty of every employer "to take, so far as is reasonably practicable, such measures as are necessary to ensure the safety and health of persons (not being the employer's employees) who may be affected by any undertaking carried on by the employer in the workplace". Section 2 is a public liability section for the site; it is not the general public liability policy the business holds for its premises, which is set out in public liability insurance for Singapore SMEs: the complete guide.

Erection all risks, and how it differs

Erection all risks is the construction-phase cover for machinery, plant and equipment. A Singapore insurer describes it as protection during the erection, testing and commissioning of machinery, plant and equipment, with a material damage section for physical loss and damage during the installation and assembly of electrical and mechanical parts and a third-party liability section for death, injury or property damage caused by the engineering works. It has the same two-section structure as CAR. The difference is the subject matter: CAR is for building and civil engineering works; EAR is for the mechanical and electrical installation that goes into them.

What neither policy covers

A CAR or EAR policy is defined by its exclusions as much as its grant. The exclusions in a published CAR wording follow a pattern, and each one names another policy or no policy at all:

Excluded	Where it sits instead
Injury to the contractor's own employees	Work injury compensation insurance under the Work Injury Compensation Act 2019, and employers' liability for the common-law route (employers' liability in Singapore)
Design defects	The designer's professional indemnity (professional indemnity insurance: the complete guide)
The defective work itself	Not insured; damage the defect causes to other parts of the works is, subject to the wording
Wear and tear, corrosion, oxidation and deterioration	Not insured
Plant breakdown without an external accident	Machinery breakdown cover
Consequential loss: loss of use, loss of profit, delay	Not insured under the standard wording; delay in start-up is an optional extension
War and nuclear risks	Not insured

The exact scope of each exclusion is the policy wording's, and the wording is what a claim is decided on.

What PSSCOC 2020 requires

Public sector construction procurement in Singapore runs on the Public Sector Standard Conditions of Contract. BCA publishes the current form for construction works, the Eighth Edition of July 2020, with a List of Amendments on the same page; clause 4.5(2) was amended on 21 June 2024. Two clauses govern insurance:

Clause 27, Insurance for Personal Injury, Work Injury Compensation and Property Damage, in three parts: 27.1 The Policies, 27.2 Damage to Property when Contractor Not Negligent, and 27.3 Default in Insuring. Clause 27.1 requires the contractor, before the commencement of any work under the Contract, to maintain three things: insurance covering liability for personal injury or death of any person arising out of the carrying out of the Works, subject to any limitations permitted by the Specifications; the approved policy required under the Work Injury Compensation Act; and such insurance as the Contract specifically requires for injury or damage to property other than the Works caused by the Contractor's negligence, omission, breach of contract or default. Those insurances are subject to the limitation of liability for any one accident set out in the Appendix, and they provide for the Employer's interests to be noted as Principal for employer's liability or as an Additional Insured with a cross liability provision for third party liability. Clause 27.2 is the separate policy: in the joint names of the Employer and Contractor, for such amounts of indemnity as are specified in the Specifications or other Contract documents, against loss, expense, costs, damages, liability or claim the Employer incurs from injury or damage to property, including the Employer's property but not the Works themselves, caused by collapse, subsidence, vibration, weakening or removal of support, or lowering of ground water arising out of the works where the Contractor is not negligent.

Clause 28, Insurance of the Works, in two parts: 28.1 Risks to be Insured and 28.2 Application of Insurance Moneys (PSSCOC 2020). This is the contract's demand for the section 1 cover: in the joint names of the Employer and the Contractor, against all damage, loss or injury from whatever cause other than the excepted risks, to the Permanent Works, any Temporary Works and all unfixed plant, materials and goods on or adjacent to the Site, for not less than the Contract Sum shown in the Letter of Acceptance plus the percentage stated in the Appendix for professional fees; kept insured until 14 days after the Date of Substantial Completion and, for damage from a cause arising before it began, through the Defects Liability Period; with the proceeds applied to reinstatement.

The definitions at the front of the form make the point that decides a tender: "Conditions" means the Standard Conditions and the Particular Conditions of Contract, and the clause 27.2 amounts of indemnity are "as may be specified in the Specifications". The standard form is the same on every public tender and it fixes the floor for the works at clause 28.1; the liability limits in the Appendix and the clause 27.2 amounts are not the same from one tender to the next. The compliance steps, clause by clause, are in how to comply with PSSCOC insurance clauses for a government construction tender, and the simplified form for smaller works in PSSCOC-lite for Tender Lite.

The performance security is a separate obligation under clause 4.5, Security Deposit, of the same form; bonds are a different instrument from insurance and are set out in surety bonds vs performance bonds.

Private contracts, and the sub-contractor's position

A private developer or main contractor writes its own insurance clause, and the same questions apply: which sections, in whose names, for what sums, for what period, and who holds the policy. A sub-contractor is either named as an insured under the main contractor's or the principal's project policy, or carries its own. The clause in the sub-contract says which; the certificate of insurance evidences it. Whether to hold a project-specific policy or an annual policy that covers every job is the decision in annual blanket CAR vs project-specific CAR for Singapore SME contractors, and the renovation case, where the building owner or MCST sets the requirement, is in how to obtain renovation CAR insurance for HDB, MCST and condo fit-out works.

Where CAR sits in the construction stack

CAR and EAR are the project-phase covers. They sit beside the covers that follow the business rather than the project: work injury compensation, which section 24 of the Work Injury Compensation Act 2019 requires for every employee, less the classes the Regulations exclude; the BCA registration that decides which tenders the firm is eligible to enter, in what insurance do BCA CW01 and CW02 contractors actually need; and the full stack in construction insurance in Singapore: BCA, SCAL, CAR and the full picture.

Common Mistakes

Reading CAR as one cover. It is two sections, the works and the third-party liability, and a schedule can carry one without the other: on one Singapore insurer's product, public liability is an optional extension to the works cover.
Reading the sum insured on the works once. PSSCOC clause 28.1 sets it at not less than the Contract Sum plus the Appendix percentage for professional fees; a variation that moves the Contract Sum moves the floor.
Assuming the principal's project policy covers your employees. It does not; work injury compensation for your own employees is your duty under section 24 of WICA, with an MOM-designated insurer.
Treating the defect and the damage as the same thing. The defective work itself is excluded; the damage it causes to other parts of the works is insured, subject to the wording.
Reading the PSSCOC standard form for the amounts. The form sets the structure and the floor for the works; the liability limits and the clause 27.2 amounts are in the tender's Appendix, Specifications and Particular Conditions.
Bringing an EAR exposure to a CAR wording. Machinery and plant through erection, testing and commissioning is EAR's subject matter.

What This Means for Your Business

Read the insurance clause of the contract in front of you before the quotation, not after. For a public sector tender that is clause 27 and clause 28 of PSSCOC 2020 read together with the Appendix and the Specifications: the three clause 27.1 policies and how the Employer is noted on them, the clause 27.2 joint-names policy and its amounts, the clause 28 sum on the works and its period, and the default provisions in 27.3 and 28.1. For a private contract it is whatever the clause says, and the sub-contract decides whether you are named on the main contractor's policy or hold your own.

Match the policy schedule to the clause on four points: the sections carried, the sum insured on the works, the limit on the third-party section, and the names on the policy. Then evidence it with a certificate of insurance that the Employer's quantity surveyor reads against the clause; the route is in how to obtain a certificate of insurance for a tender deadline in 24 hours.

Covarage holds the project policies, the work injury compensation policy and each contract's insurance clause in one place, and introduces you to a licensed intermediary when a tender changes what you must carry. The contract obligation is yours; the record is what we keep.

Questions to Ask Your Adviser

Which sections does our CAR policy carry, and what is the sum insured on the works and the limit on the third-party section?
Who is named on the policy, and does that match the joint-names requirement in the contract?
Does the period of cover run from commencement through practical completion and the maintenance period the contract names?
On this project, are we insured under the principal's policy or our own, and what does the sub-contract say?
Which of the exclusions in the wording matter for this site: existing structures, underground services, vibration, weakening of support?
Does the project include plant or machinery that needs an EAR section rather than CAR?

Related Information

Published 11 September 2026. Source verified 11 September 2026.