The collapse of a building under construction in Bangkok on March 28, 2025, following a powerful earthquake in Myanmar has sparked widespread public concern about the potential financial impact on local insurers and insurance implications. The construction site was insured under a contractors’ all risks (CAR) policy, and initial reports and market speculation suggest that the event could cause serious financial strain for the domestic insurance industry.

Nevertheless, local insurers connected to the site of the collapse may face limited exposure for two main reasons:

• Reinsurance significantly mitigates local insurers’ exposure. According to market sources, 95% of the CAR coverage for the construction site was reinsured by foreign reinsurers. This is standard risk-management practice for large-scale infrastructure and construction projects, allowing local insurers to participate in underwriting while transferring most of the liability offshore. As a result, the direct financial impact on domestic insurers is expected to be minimal, subject to the reinsurance contracts and any potential claims disputes.
• Potential exclusions may apply. The Thai General Insurance Association has issued an interim public advisory noting that coverage under the CAR policy may be limited or excluded altogether, pending a full investigation. CAR policies often contain exclusions for certain events, depending on how the policy is worded and the actual cause of the incident. A thorough factual and forensic investigation will be necessary to determine the true cause and assess policy applicability.

For further information or assistance in reviewing CAR or project insurance coverage in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Witchupong Chittchang at [email protected], or Ajaree Trachukul at [email protected].