Optima Insurance Brokers Pvt. Ltd.

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Our views on important risk issues and emerging risks.

Free Covers in C.A.R. Insurance

Insurers give certain free covers in the C.A.R. policy if the sum insured is more than Rs 100 crores (INR 1 billion). Recently some insurers have started offering these covers even if the sum insured is more than Rs 50 crores (INR 500 million)

The important free covers and there description are given below for the insurance buyers’ easy understanding:

Waiver of Subrogation

This clause means that insurers will not be proceeding against any of the parties who are associated with the project and covered under policy, for recovery. e.g. If sub contractor’s negligence has resulted in loss, insurance company can normally proceed against them for recovery following payment to Principal. But if this waiver has been agreed, they will not

50:50 Clause

This clause comes into play, when there is a doubt whether the claim will fall under marine or erection. Under such circumstances, loss is contributed 50:50 by both the policies.

Waiver of Contribution

This clause provides for waiver of applicability of contribution clause between Principal and the Contractor (only) i.e. if there are more than one project policies covering the same interest, then the policy carrying this waiver would become the primary policy and in case of any loss, would pay up without waiting for contribution from the other policies.

Loss Minimization Expenses

Upto the limit specified on the face of the policy, the policy pays for all expenses incurred to reduce/ minimize the loss (over and above the main loss payable under the policy) e.g. there is water inundation in the project site, the client will incur expenses for removing sound equipment to a safer location. The policy will pay such expenses because if the equipment were allowed to remain on site then they would have suffered higher losses.

Automatic Reinstatement Of Sum Insured

Subsequent to the payment of a claim the insured is supposed to reinstate the sum insured to the extent of loss paid else it may suffer under insurance for future losses .Under this clause, upto the limit specified the sum insured is automatically reinstated , following settlement of a claim, without any additional premium being paid .


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Optima’s core group has more than 100 man-years of experience in insurance. Our experience has trained us in reading the fine print of insurance policies, understanding it and applying it for the benefit of our clients.

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