Cover for Existing Structures
Cover for existing structures records whether a Construction or Erection All Risks policy extends to pre-existing buildings and installations owned or under the care, custody or control of the principal on which works are being carried out.
- Category
- Construction/Project
- Data type
- Yes/No
- Risk drivers
- Severity, Accumulation
- Underwriting impact
- Premium, Sublimit, Exclusion
Typical proposal-form questions
- Are there existing buildings or plant on or adjoining the site that are owned by the principal and could be affected by the works?
- Is cover for these existing structures required under this policy or is it already insured elsewhere?
- What is the declared value of the existing structures to be included?
Evidence
- Property schedule of existing buildings
- Existing property insurance policy (to check for overlap)
- Site plan distinguishing new works from existing structures
Why it matters for underwriting
Many construction and renovation projects take place on sites where the principal already owns buildings or plant that continue in use, or stand vacant, alongside the new works. Because standard CAR/EAR wording is designed for new construction, damage to these existing structures caused by the contractor’s activities, such as fire spreading from hot works or structural damage from alterations, falls outside the core cover unless an explicit extension is granted. Underwriters need to know whether such structures exist and whether cover is expected under this policy, since failing to address the gap leaves the principal exposed and can also create disputes over which policy responds after a loss.
Capturing the attribute and evidence
Proposal forms ask whether existing buildings or installations owned by the principal are present on or adjoining the site and whether cover for them is required under the CAR/EAR policy. Underwriters review the property schedule describing these existing structures, check the principal’s existing property insurance policy to identify potential overlap or gaps, and use the site plan to distinguish clearly between new works and existing assets.
Effect on coverage, premium and conditions
Where cover for existing structures is granted, it is typically provided as a separate section with its own declared value and sublimit, rated in addition to the new works, and the causes of loss covered may be narrower than for the works themselves. Where no extension is granted, existing structures are usually explicitly excluded, and insurers may require confirmation that a separate property policy remains in force throughout the construction period to avoid a coverage gap.
Mitigation measures
Principals reduce the risk of a coverage gap by clearly identifying all existing structures on site during the proposal stage, coordinating with their property insurer to confirm continued cover or agreeing an explicit extension under the CAR/EAR policy, and ensuring contractors follow hot-work and other permit-to-work procedures near occupied or valuable existing buildings.