Cross Liability Cover is given multiple contractors are working at the construction site. It happens in Big Projects, say for example at a Construction of Power Plant. One contractor will be there for erection of boilers while Another contractor would be employed for the construction of cooling towers. A Third Contractor would be for erection of turbines and generators.
And during the course of work, if there is damage to construction activity of one contractor on account of negligence of other contractor or the crane of one contractor is damaged as it is hit by the crane of another contractor, so, in that situation, such cases will come under Cross Liability Cover.
So, this extension is very important. In that situation, the contractor, whose property was damaged need not go to the court of law against the other contractor.
So, the Insurance Policy under the Cross Liability Cover will consider as if it had given third party liability cover to each contractor separately. So, all the claims will be settled under the CAR Policy without the need of going to court.