Contractor's All Risks (CAR) & Erection All Risks (EAR) Insurance Malaysia

For CIDB G1-G7 contractors, principal contractors, and subcontractors. Project insurance that holds up at JKR pre-award, PAM 2018 sign-off, and MOF tender review.

Foundation is a specialist property and engineering insurance intermediary. We arrange CAR and EAR policies that match how the project is actually being executed: site conditions, principal type, subcontracting structure, contract value. Not generic templates.

New to CAR insurance? Start with our complete CAR insurance guide for a full explainer of how the cover works, what's excluded, and how the claims process runs. Already familiar? Use the calculator below.

Need a number for a tender deadline? WhatsApp Kevin directly, typical reply within working hours.

What CAR and EAR insurance cover in Malaysia

Contractor's All Risks (CAR) is a project-based policy that covers physical loss or damage to the works during construction, plus third-party liability arising from the works. It's the standard cover for civil and building projects in Malaysia.

Erection All Risks (EAR) is the same idea applied to mechanical and electrical erection, plant installation, machinery commissioning, M&E works inside an existing building. EAR usually extends to cover testing and commissioning periods, which CAR does not.

Most Malaysian construction projects need one of these two policies. Some projects need both: the civil contractor takes CAR for the building, the M&E contractor takes EAR for the systems being erected inside it. The decision rule isn't price, it's which policy is recognised under the contract you're signing.

What's covered under a standard CAR/EAR policy

How CAR/EAR premium is determined

Premium is driven by the perceived risk of the works, not a fixed schedule. The calculator above produces an indicative range using the same factors an underwriter weighs at first quote stage. Real quotes vary based on documentation, controls, and the principal's contract conditions.

The five drivers that move the premium most:

What the calculator does: combines these inputs into a working range. What it doesn't do: replace an underwriter looking at your specific site conditions and method statement. For projects above RM10 million, the difference between estimate and bound premium can come down to documentation quality.

How CAR/EAR fits with the other contractor covers

CAR and EAR are project policies. They sit alongside the statutory and annual covers every CIDB-registered contractor needs to keep running. Contractors who treat CAR as their only insurance run two clear gaps: workers (covered separately under WC and SOCSO) and operational liabilities outside the project (covered under Comprehensive General Liability or annual Public Liability).

The full contractor stack, CAR/EAR plus the statutory and annual layers, is laid out in our Malaysian contractor insurance stack guide. Read that first if you're new to project insurance.

JKR, MOF, and government tender requirements

Government tenders (JKR-led, MOF-administered, agency-direct) come with prescribed insurance clauses. The clause patterns are similar but not identical, and the specific clause numbers shift between SST volumes and revisions.

For full handling at tender stage, our government project insurance cheat sheet walks through the SST clause patterns and what to attach as proof.

PAM 2018 and IEM private-developer contracts

Private developer projects use PAM 2018 (Persatuan Arkitek Malaysia) or IEM (Institution of Engineers Malaysia) standard forms. Both prescribe insurance but with different defaults. The principal contractor usually arranges CAR for the duration; the named insureds typically include the employer, principal contractor, and all subcontractors.

Where contractors get caught: PAM 2018 maintenance period and the IEM testing-and-commissioning clauses. CAR's standard maintenance cover may not extend long enough; EAR is required where M&E commissioning is in scope. Read the conditions, not the cover note.

Subcontractor named-under-main vs own CAR

Subcontractors face a recurring question: are you covered under the principal's CAR, or do you need your own? It depends on the contract.

Common exclusions that catch contractors

Standard CAR and EAR policies exclude a defined set of perils that contractors must address either through other policies or through contract management. The most commonly missed:

• Design defects, covered under Professional Indemnity (SPPI), not CAR.
• Faulty workmanship, DE3/DE4/DE5 extensions can buy back partial cover; the base policy excludes this.
• Consequential loss / delay in start-up, separate DSU cover required.
• Wear, tear, and gradual deterioration, never covered.
• War, terrorism, political risk, separate buy-backs available; not in standard CAR.

The full list is in our 12 common CAR exclusions guide. Read it before you bid, exclusions you didn't know about become claims you can't make.

What to send us for a binding quote

To convert the calculator estimate into a bound policy, underwriters need:

• Contract sum and breakdown (works, materials, fees)
• Project description and method statement
• Site address, site plan, neighbouring use
• Project schedule (start, completion, maintenance)
• CIDB grade and registration number
• Claims history (last 3-5 years)
• Principal contract clauses for insurance (the actual SST or PAM 2018 wording, not a summary)

Send the package via the form above or directly via WhatsApp. Most quotes turn around in 2 working days for projects under RM50 million. Larger or facultative-reinsured risks take longer.

Frequently asked questions

What's the difference between CAR and EAR?

CAR covers civil and building works. EAR covers mechanical and electrical erection, including testing and commissioning. Civil project = CAR. M&E commissioning = EAR. Mixed scope = often both, with named-insured arrangements between parties.

Is CAR insurance mandatory for CIDB contractors in Malaysia?

CIDB registration itself doesn't mandate CAR. Project contracts do. Government tenders (JKR, MOF), most private developers, and any meaningful EPC contract will require CAR or EAR as a condition of contract. In practice: if the project value is above RM200k, you'll be required to take it.

Who should be the named insured on the CAR policy?

Typically the principal contractor as first insured, plus the employer, all subcontractors, and (where relevant) consultants as additional insureds. Cross-liability is usually waived between insured parties so they can claim against each other within the policy.

How long should CAR cover run?

From site mobilisation through to practical completion, plus the maintenance / defects liability period (12 or 24 months depending on contract). For longer projects, mid-term endorsements update the sum insured as variations come in.

What does CAR not cover?

Design defects (use Professional Indemnity), faulty workmanship in the work being done (extensions partially buy back), consequential loss and delay (use DSU), and the standard exclusions for war, gradual deterioration, and contractual penalties beyond the legal duty. See our CAR exclusions guide for the full list.

Can a subcontractor rely on the main contractor's CAR?

Only if the subcontractor is named as additional insured on the policy and cross-liability is endorsed. Being mentioned in the construction contract is not the same as being named on the insurance policy. Get the cover note in writing before mobilising.

How do I estimate CAR premium for a tender?

Use the calculator embedded above. It produces a working range based on contract value, project type, duration, and CIDB grade. For binding quotes, send the project specs through the form and we'll come back within 2 working days.

What's the difference between CAR and Performance Bond?

CAR is insurance, it pays for physical loss or third-party liability. Performance Bond is a guarantee, it pays the employer if you fail to perform. Most Malaysian government tenders require both, sized independently.

Does Foundation place CAR for first-time contractors?

Yes. We work with insurers who underwrite first CAR risks for newly-graded CIDB contractors, including G3-G5 contractors taking on their first major project. Tell us upfront if it's your first CAR placement, it changes which insurer we approach.

How is Foundation different from a price-comparison broker?

We are an intermediary, not a price-led broker. Our value is in matching how the project is being executed to the underwriter who will price it best. Site conditions, contractor profile, principal type, contract clauses. Most contractor placements come down to those four factors, not a percentage off the rate.

Why contractors work with Foundation

Foundation is a specialist property and engineering insurance intermediary. We focus on construction, industrial, and high-risk operational covers, not retail or motor. That focus is why our quotes are tighter and our placements hold up under principal scrutiny.

What you get when you place CAR/EAR through us: direct access to underwriters who specialise in Malaysian construction risk, terms that match your principal contract (not a generic template), and ongoing support through claims if something goes wrong on site.

WhatsApp Kevin to start a conversation or use the form above to send project specs.

Disclaimer: This page provides general guidance on Contractor's All Risks and Erection All Risks insurance available in the Malaysian market as of April 2026. Policy terms, conditions, and availability vary by insurer. Always review your specific policy wording or consult a qualified insurance professional before making coverage decisions. Foundation is a specialist property and engineering insurance intermediary. We do not provide legal, contractual, or compliance advice.