Building a warehouse in Almaty involves real risks: fire, damage to structures during installation, workplace accidents, harm to neighbouring facilities. Construction and erection all-risk insurance (CAR) in Kazakhstan is not mandatory for private developers — but when working with banks and leasing companies it is almost always required. Let's look at what a policy covers and how much it costs.
CAR/EAR
construction insurance standard
Contractors All Risk / Erection All Risk — the international standard adopted in Kazakhstan
0.15–0.5%
approximate insurance premium rate
of construction cost per year — depends on the type of facility, duration, and seismic zone risks
Halyk SC JSC
one of the leading CAR insurers in Kazakhstan
and others: LexGarant, Nomad Insurance, Eurasia — offer CAR policies for construction
9 points
Almaty seismic zone
affects the insurance rate — elevated coefficient vs non-seismic regions
What Construction and Erection All-Risk Insurance Is
CAR (Contractors All Risk) is a comprehensive policy covering all risks during construction work. The name "All Risk" means that all possible causes of damage are covered except those explicitly excluded.
EAR (Erection All Risk) is the equivalent of CAR for erection work (equipment, metal structures).
For construction of a metal warehouse in Almaty, CAR is used with an erection works section included.
What a CAR Policy Covers
A standard CAR policy consists of two sections:
Section I: The Construction Object
Insurance of physical damage to the facility under construction:
| Risk | Covered? |
|---|---|
| Fire, explosion | Yes |
| Natural disasters (wind, flood) | Yes |
| Earthquake (Almaty seismicity) | Yes (important for Almaty!) |
| Structural collapse during erection | Yes |
| Theft of materials from the site | Yes (with conditions) |
| Design errors | No (excluded) |
| Wilful act of the insured | No |
| Normal wear and tear | No |
Section II: Third-Party Liability
If damage is caused during construction to:
- Adjacent buildings and structures
- Passers-by
- Vehicles
- Engineering utilities
For Almaty with its dense industrial zoning, third-party liability coverage is especially relevant.
Optional Extensions
- Insurance of contractor's equipment and machinery on site
- Delay in start-up insurance (EAR extension)
- Professional indemnity for the designer
Almaty Seismicity and the Insurance Policy
Almaty is in an 8–9-point seismic hazard zone. This directly affects insurance terms:
- Earthquake risk must be explicitly included in the policy (some basic policies exclude it as a "catastrophic risk")
- Loading factor on the base rate: 1.2–1.5× for the seismic zone
- Preventive measure requirements: the insurer may require compliance with SP RK 2.03-30-2017 as a condition of coverage
When obtaining a policy, confirm: is earthquake included in the coverage? If not — this is a significant gap in protection for an Almaty project.
Who Needs a CAR Policy
Developer (project owner):
- Mandatory when obtaining a bank loan or leasing — banks require a policy
- Protection of own investment against force majeure
- For high-value projects from 50 million tenge
Contractor:
- When participating in government tenders — bid security often includes third-party liability
- Protection against client claims for accidental damage
- Requirement of international safety standards
Insurance Companies in Kazakhstan
| Company | CAR specialisation |
|---|---|
| Halyk SC JSC | Large projects, public construction, corporate clients |
| LexGarant Insurance | CAR, contractor third-party liability |
| Nomad Insurance | Small and medium business |
| Eurasia | Comprehensive corporate programmes |
| Jusan Life | Finance-linked products |
How Policy Cost Is Calculated
| Parameter | Effect on rate |
|---|---|
| Project cost | Basis for the insured sum |
| Construction duration | The longer, the higher the premium |
| Type of facility | Metal structures — lower risk than monolithic RC |
| Region (seismicity) | Almaty: coefficient +20–50% |
| Contractor experience | Less experienced = higher rate |
| Safety measures | Fire extinguishers, fencing, security reduce the rate |
Indicative rate for Almaty: 0.15–0.5% of construction cost per year.
Example:
- Construction cost: 150,000,000 ₸
- Construction duration: 6 months
- Rate: 0.3% per year → 0.15% for 6 months
- Insurance premium: ~225,000 ₸
For higher-value projects (from 500 million ₸), rates are individual — it is worth requesting quotes from several insurers.
What a CAR Policy Does NOT Cover
| Risk | Status |
|---|---|
| Design errors, material defects | Not covered |
| Normal wear and tear, gradual deterioration | Not covered |
| Wilful act or gross negligence of the insured | Not covered |
| Contractor's warranty obligations after handover | Not covered (separate warranty period policy needed) |
| Production downtime due to construction | Not covered without extension |
Insurance for the Completed Facility
After the warehouse is commissioned, the CAR policy ceases. A commercial property insurance policy is required:
- Fire, natural disasters (including earthquake)
- Unlawful acts by third parties
- Building owner liability insurance
Rate for a completed warehouse: 0.1–0.3% of the building value per year.
We build warehouses in Almaty — and help clients arrange CAR insurance
StroyHub recommends insurance partners and helps clients properly document the project for obtaining a CAR policy.