Introduction

Why estimates are not limits in Contractor’s All Risks Claims

This article examines a real-world claim under a Contractor’s All Risks insurance policy involving damage to a temporary storage shed on a construction site.

The dispute arose not from the facts of the loss, but from how the insurer’s claims handler interpreted preliminaries within the construction contract and their relationship to the sum insured.

At the centre of the disagreement was a mistaken assumption that a preliminary cost estimate could be treated as both the actual value of the damaged works and as a benchmark for assessing underinsurance across the entire project.

That assumption does not align with established construction or insurance practice.

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