ALL INDIA TARIFF

ON

CONTRACTOR’S ALL RISKS INSURANCE

TARIFF ADVISORY COMMITTEE

ADOR HOUSE, MUMBAI

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THE TARIFF ADVISORY COMMITTEE
(HEREINAFTER CALLED THE COMMITTEE) HAS
LAID DOWN RULES, REGULATIONS, RATES,
ADVANTAGES, TERMS AND CONDITIONS, AS
CONTAINED HEREIN, FOR TRANSACTION OF
CONTRACTOR’S ALL RISKS INSURANCE BUSINESS
IN INDIA IN ACCORDANCE WITH THE PROVISIONS
OF PART II B OF THE INSURANCE ACT, 1938.

ANY BREACH OF TARIFF SHALL BE DEALT WITH AS

PER THE RELEVANT PROVISIONS OF THE
INSURANCE ACT, 1938.

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 CONTRACTOR’S ALL RISKS INSURANCE POLICY
INDEX

Contents Page

1. GENERAL RULES & REGULATIONS-

2. STANDARD POLICY FORM -

3. PROPOSAL FOR MACHINERY INSURANCE -

4. RATING SCHEDULE -

4.1 Group I - Electrical Machinery installed in Plants

other than Cold Storages and Ice Plants.
4.2 Group II - Mechanical Items Machines
common to all Industries.
4.3 Group III - Machinery in Cold Storages and Ice
Plants
4.4 Group IV – Fertilizer plants / petrochemical
Plants/ Refineries

4.5. Declined list of Machines

4.6 Excess

4.7 Escalation Provision

4.8 Option to insure under MB/EEI

5 ADDITIONAL RATES -

6 ENDORSEMENTS -

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 PROPOSAL FORM

------------------------------------------------------------------------------------Co. Ltd.

PROPOSAL AND QUESTIONNAIRE FOR CONTRACTOR'S ALL RISKS INSURANCE

(The liability of the Company does not commence until this proposal has been accepted by the
Company and the premium paid)

Information given herein will be treated in strict Confidence.

Put a ( ) mark wherever applicable.

S. No. Details Answer

1. a) Name & Address of the Principal Trade or a)

business

b) Name & Address of the Contractor Trade b)

or business

c) Name & Address of the Sub Cont- ractor, if c)

any, Trade or Business

THE INSURED INTERESTS -

Contractor Sub- Principal
2. Whose Interests are to be Insured? contractor

3. THE CONTRACT WORKS -

a) Full description of the Contract

b) Please give details -

i) Building (type of construction, number

of storeys etc.)
ii) Blasting operation
iii) Excavation work
iv) Pile driving
v) Tunneling
vi) Dam Construction or diversion of water
vii) Others (Specify)

Note - A site plan of contract works may

be enclosed.

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 4. i) Is this a contract/Sub-contract
forming part of an over all construction Yes No.
project

ii) If yes, give name of the Project

5. a) Will the construction be carried out by your

own personnel? Yes No.

b) If not, by whom? b)

c) Past experience of the Contractor c)

6. a) Will any sub-contractors be taking part in Yes No.

the work of construction?

b) If yes, what is their position as regards this b)

insurance?

THE CONTRACT SITE -

7. a) Location of Contract site a)

b) Nearest port and/or Railway Station and b)

distance.

Note - A complete lay out of the site may

be enclosed

8. a) Are any Special Risks of one or more of a)

the following involved?

i) Earthquake-Fire & Shock

ii) Landslide/Rockslide/ Subsidence
iii)Flood/Inundation
iv) Storm/Tempest/Hurricane/Typhoon/
Cyclone
v) Collapse
vi) Water Damage for ’Wet’ risk i.e.
Contract involving construction in
rivers, canals, lakes or sea.

b) Distance from nearest river, lake, reservoir

or sea - the names and particulars to be b)
given

c) Elevation of construction site above normal c)

river, lake, reservoir or sea level

d) Is there any record of the construction site d)

ever having been affected by any of the
major perils specified in (a) above?
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 9. Give full details regarding geological
condition including sub soil

10. a) Brief description of the arrangements a)

made for storage of construction materials
and equipments - whether in open or
closed premises.

b) i) Will there be a watch and ward round the b) (i)

clock?
ii) If not, what precautions will be taken
against theft, malicious damage etc. ii)

11. THE INSURANCE -

a) Estimated construction period excluding a) . . . Months

maintenance period (cover to commence .
from the date of first arrival of consignment from ……… to ....
material at site or commencement of work
whichever is earlier)

b) Cover required during maintenance period, a) . . . . months,

if any from…….. To…………..

c) Probable date on which construction is c)

expected to be completed

d) Period of Insurance required d). . . . months,

from……… To………..

12. a) Have you approached any other Insurance

Yes No
Co. for Insurance Cover in respect of this
Proposal?

b) If yes, please state name of the Insurance b)

Company.

13. Has any such proposal been -

a) declined? Yes No

b) withdrawn? Yes No

c) accepted subject to an increased rate or

Yes No
special conditions?

SUM INSURED -

14. i) Contract works -

Note-Please attach schedule of quantities and rates and/or values (Permanent & Temporary
works including all materials to be incorporated therein)

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 a) Contract Price Rs. . . . . . . . . .

b) Materials or items supplied by the

Principal Rs. . . . . . . . . .

c) Any additional items not included in (a)

and (b) above Rs. . . . . . . . . .

d) Landed cost of imported items as at

construction site (please specify Rs. . . . . . . . . .
whether included in (a) and/or (b)
above)
at Exchange Rate -------------

TOTAL VALUE OF CONSTRUCTION . . . Rs………………

ii) Construction Plant & Machinery to be used

at the construction site (Details as per Rs. . . . . . . . . .
attached sheet)

iii) Clearance & Removal of Debris Rs. . . . . . . . . .

iv) Insured's own surrounding property. Rs. . . . . . . . . .

v) Extra charges for Express Freight

(excluding Air Freight) overtime Sunday & Rs. . . . . . . . . .
Holiday rates of wages, if required.

vi) On increased Replacement value for

item i (a) (b) & (d) above, if required Rs. . . . . . . . . . ( --------- % )

vii) Third Party liability -

a) for any one accident Rs. . . . . . . . . .

b) for all Accidents during the period Rs. . . . . . . . . .

15. Do you wish to opt for higher amounts of Deductible Excess? No

Yes

If yes, whether i) 2 times ii) 5 times Iii ) 10 times iv) 20 times

I/We the undersigned hereby declare that the above statements and particulars are true and complete
and I/We declare and agree that this declaration and the answers given above shall be held to be
promissory and shall be the basis of the contract between me/us and the company.

Place.................
Date.................. Proposer’s Signature.....................

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 Section 41 of Insurance Act 1938

PROHIBITION OF REBATES -

1. No person shall allow or offer to allow, either directly or indirectly as an inducement to any
person to take out or renew or continue an insurance in respect of any kind of risk relating
to lives or property in India, any rebate of the whole or part of the commission payable or
any rebate of the premium shown in the policy; nor shall any person taking out or renewing
or continuing a policy accept any rebate, except such rebate as may be allowed in
accordance with the published prospectus or tables of the Insurer.

2. Any person making default in complying with the provisions of this section shall be
punishable with fine, which may extend to five hundred rupees.

CONTRACTOR'S ALL RISKS INSURANCE POLICY

Issuing Office

Agency Policy No
THE SCHEDULE

The Company ____________________________________INSURANCE COMPANY

LIMITED

The Insured –

a) Name & Address of the Principal

b) Name & Address of the Contractor(s)

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c) Location of contract site

Period of Insurance
From . . . . . . . . . . . . to . . . . . . . . . . .. plus . . . . . . months maintenance period.

Premium (Subject to adjustment on completion of the project)

Rupees . . . . . . .

Description of contract works –

Insured Items Sum Insured

SECTION I – MATERIAL DAMAGE –

1. Contract works (Permanent and Temporary works including all

materials to be incorporated therein) –

1.1 Contract price

Rs. . . . . .
1.2 Materials or items supplied by the Principal

2. Any other works, & installations not included in 1.1 and 1.2
above (eg camp, colony, stores etc as per list enclosed)

3. Construction Plant & Machinery (Memo. 6) (as per list

enclosed)

4. Extensions (on First loss Indemnity basis) –

4.1 Express Freight, Overtime (Memo 5)

4.2 Principal’s Surrounding Property (Memo 7)
4.3 Debris removal (of insured property)
4.4 Any other extension (e.g. Escalation, Air Freight, Addl.
Custom Duty, Maintenance visits or extended
maintenance cover as per forms attached )
--------------------------------------------------------------------

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 --------------------------------------------------------------------
--------------------------------------------------------------------

TOTAL FOR SECTION 1 . . Rs. . . . . . .

SECTION II – THIRD PARTY LIABILITY –

1. Limit of indemnity in respect of any one accident or series of

accidents arising out of one event. Rs. . . . . .

2. Total limit of Section II during policy period. Rs. . . . . .

EXCESSES FOR SECTIONS I & II

1. for Storage & Construction claims Rs. . . . . . each claim

2. for Maintenance period claims Rs. . . . . . each claim

3. for Major peril claims as per Memo 8 of Section I Rs. . . . . . each claim

SIGNED ON BEHALF OF THE COMPANY AT _____ THIS ______ DAY OF ______ 2001

EXAMINED

CONTRACTOR'S ALL RISKS INSURANCE POLICY

WHEREAS the insured named in the schedule hereto had made to

__________________________ Co Ltd. (hereinafter called "the Company") a written proposal
by completing a proposal form which together with any other statements made in writing by the
Insured for the purpose of this policy, is deemed to be incorporated hereto.

NOW THIS POLICY OF INSURANCE WITNESSETH that subject to and in consideration of the
Insured having paid to the Company, the premium mentioned in the schedule and subject to the
terms, exclusions, provisions and conditions contained herein or endorsed hereon the
Company will indemnify the Insured in the manner and to the extent hereinafter provided.

GENERAL EXCLUSIONS -

The Company will not indemnify the Insured in respect of loss, damage or liability directly or
indirectly caused by or arising out of or aggravated by -

a) War, Invasion, Act of foreign enemy, hostilities or War like operations (whether war be
declared or not) Civil War, rebellion, revolution, insurrection, mutiny, Civil commotion,

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 Military or usurped power, martial law, conspiracy, confiscation, commandeering a group of
malicious persons or persons acting on behalf of or in connection with any political
organisation, requisition or destruction or damage by order of any Government de jure or
defacto or by any Public, Municipal or Local Authority;

b) Nuclear reaction, Nuclear radiation or Radioactive contamination;

c) Willful act or willful negligence of the Insured or of his responsible representative;

d) Cessation of work whether total or partial.

In any action, suit or other proceedings where the Company, allege that by reason of the
provisions of Exclusion (a) above any loss, destruction, damage or liability is not covered by
this insurance, the burden of proving that such loss, destruction, damage or liability is covered
shall be upon the Insured.

PERIOD OF COVER -

Construction Period -

The liability of the Company shall commence, (notwithstanding any date to the contrary
specified in the Schedule) only from the time of commencement of work after the unloading of
the property specified in the schedule from any conveyance at the site specified in the schedule
whichever is earlier and shall expire on the date specified in the schedule. However, the
Company’s liability expires also for parts of the insured contract works taken over or put into
service by the Principal prior to the expiry date specified in the policy whichever shall be earlier.

‘If actual construction period is shorter than the period indicated in the schedule, no refund of
premium shall be allowed unless specifically allowed by Insurers.’

At the latest, the insurance shall expire on the date specified in the Schedule but if the work of
construction included in the insurance is not completed within the time specified hereunder, the
Company may extend the period of insurance but the Insured shall pay to the Company
additional premium at rates to be prescribed by the Company.

GENERAL CONDITIONS

1. The due observance and fulfillment of the terms of this Policy in so far as they relate to
anything to be done or complied with by the Insured and the truth of the statement and
answers in the questionnaire and proposal made by the Insured shall be a condition
precedent to any liability of the company.

2. The Schedule and the Section(s) shall be deemed to be incorporated in and form part of
this Policy and expression ‘this Policy’ wherever used in this contract shall be read as
including the Schedule and the Section(s). Any word or expression to which a specific

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 meaning has been attached in any part of this Policy or of the Schedule or of the
Section(s) shall bear such meaning wherever it may appear.

3. The Insured shall at his own expense take all reasonable precautions and comply with
all reasonable recommendations of the Company to prevent loss, damage or liability and
comply with statutory requirements and manufacturers' recommendations.

4. a) Representatives of the Company shall at any reasonable time have the right to
inspect and examine the risk and the Insured shall provide the representatives of the
Company with all details and information necessary for the assessment of the risk.

(b) The Insured shall immediately notify the Company by Telegram and in writing
of any material change in the risk and cause at his own expense such
additional precautions to be taken as circumstances may require and the
scope of cover and/or premium shall, if necessary, be adjusted accordingly.

No material alteration shall be made or admitted by the Insured where by the risk is
increased unless the continuance of the Insurance be confirmed in writing by the
Company.

5. In the event of any occurrence, which might give rise to a claim under this Policy, the
Insured shall –

a) Immediately notify the Company by Telephone or Telegram as well as in writing

giving an indication as to the nature and extent of loss or damage;

b) take all steps within his power to minimise the extent of the loss or damage;

c) preserve the parts affected and make them available for inspection by a
representative or Surveyor deputed by the company;

d) furnish all such information and documentary evidence as the Company may
require;

e) inform the police authorities in case of loss or damage due to theft or burglary.

The Company shall not in any case be liable for loss, damage or liability of which no notice
has been received by the Company within 14 days of its occurrence.

Upon notification being given to the Company under this condition the Insured may carry
out the repair or replacement of any minor damage not exceeding Rs. 2,500/-. In all other
cases a representative of the Company shall have the opportunity of inspecting the loss or
damage before any repairs or alterations are affected. If a representative of the Company
does not carry out the inspection within a period of time which could be considered as
adequate under the circumstances the Insured is entitled to proceed with the repairs or
replacement.

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 The liability of the Company under this Policy in respect of any item sustaining damage shall
cease if said item is not repaired properly without delay.

6. The Insured shall at the expense of the Company do and concur in doing and permit to be
done all such acts and things as may be necessary or required by the Company in the
interest of any rights or remedies, or of obtaining relief or indemnity from parties (other than
those Insured under this Policy) to which the Company shall be or would become entitled or
subrogated upon their paying for or making good any loss or damage under this Policy,
whether such acts and things shall be or become necessary or required before or after the
Insured's indemnification by the Company.

7. If any dispute or difference shall arise as to the quantum to be paid under this Policy (liability
being otherwise admitted) such difference shall independently of all other questions be
referred to the decision of a sole arbitrator, to be appointed in writing by the parties to or, if
they cannot agree upon a single arbitrator within 30 days of any party invoking Arbitration,
the same shall be referred to a panel of three Arbitrators comprising of two Arbitrators - one
to be appointed by each of the parties to the dispute/difference, and the third Arbitrator to be
appointed by such two Arbitrators and arbitration shall be conducted under and in
accordance with the provisions of the Arbitration and Conciliation Act 1996.

It is clearly agreed and understood that no difference or dispute shall be referable to

arbitration as hereinbefore provided, if the Company has disputed or not accepted liability
under or in respect of this Policy.

It is hereby expressly stipulated and declared that it shall be a condition precedent to any
right of action or suit upon this Policy that the award by such Arbitrator/Arbitrators of the
amount of the loss or damage shall be first obtained.

8. If a claim is in any respect fraudulent, or if any false declaration is made or used in support
thereof, or if any fraudulent means or devices are used by the Insured or any one acting on
his behalf to obtain any benefit under this Policy, or if a claim is made and rejected and no
action or suit is commenced within three months after such rejection or, in case of arbitration
taking place as provided therein, within three months after the Arbitrator or Arbitrators or
Umpire have made their award, all benefits under this Policy shall be forfeited.

9. If at the time any claim arises under this Policy there be any other insurance covering the
same loss, damage or liability the Company shall not be liable to pay or contribute more
than their rateable proportion of any claim for such loss, damage or liability.

10. This insurance may be terminated at the request of the Insured at any time in which case
the Insurers will refund appropriate premium amount subject to the following conditions -

i) Claims experience under the policy as on date of cancellation should be less than 60 %
of reworked premium.

ii) ‘The unexpired period is not less than 3 months or 25 % of the policy period whichever is
less’.

iii) Testing period should not have commenced.

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 This insurance may also at any time be terminated at the option of the Company by 15 days
notice to that effect being given to the Insured in which case the Companies shall be liable
to repay on demand a rateable proportion of the premium for the unexpired term from the
date of cancellation.

SECTION I - MATERIAL DAMAGE -

The Company hereby agrees with the Insured (subject to the exclusions and conditions
contained herein or endorsed hereon) that if, at any time during the period of insurance stated in
the said Schedule, or during any further period of extension thereof the property (except packing
materials of any kind) or any part thereof described in the said Schedule be lost, damaged or
destroyed by any cause, other than those specifically excluded hereunder, in a manner
necessitating replacement or repair the Company will pay or make good all such loss or
damage upto an amount not exceeding in respect of each of the items specified in the Schedule
the sum set opposite thereto and not exceeding in the whole the total sum insured hereby.

The Company will also reimburse the Insured for the cost of clearance and removal of debris
following upon any event giving rise to an admissible claim under this Policy but not exceeding
in all the sum (if any) set opposite thereto in the Schedule.

EXCLUSIONS TO SECTION - I

The Company, shall not, however, be liable for –

a) the first amount of the loss arising out of each and every occurrence shown as Excess in
the Schedule;

b) loss discovered only at the time of taking an inventory;

c) normal wear and tear, gradual deterioration due to atmospheric conditions or lack of
use or obsolescence or otherwise, rust, scratching of painted or polished surfaces or
breakage of glass;

d) loss or damage due to faulty design;

e) the cost of replacement, repair or rectification of defective material and/or

workmanship, but this exclusion shall be limited to the items immediately affected and shall
not be deemed to exclude loss of or damage to correctly executed items resulting from
an accident due to such defective material and/ or workmanship;

f) the cost necessary for rectification or correction of any error during construction unless
resulting in physical loss or damage;

g) loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, evidence
of debt, notes, securities, cheques, packing materials such as cases, boxes, crates;

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h) any damage or penalties on account of the Insured's non-fulfillment of the terms of
delivery or completion under his Contract of construction or of any obligations assumed
there under or lack of performance including consequential loss of any kind or description
or for any aesthetic defects or operational deficiencies;

i) loss of or damage to vehicles licensed for general road use or water borne vessels or
Machinery/Equipment mounted or operated or fixed on floating vessels/craft/barges or
aircraft.

PROVISIONS APPLYING TO SECTION - I

Memo 1 - SUM INSURED –

It is a requirement of this Insurance that the sum of insurance stated in the schedule shall not be
less than the completely erected value of the property inclusive of freights, custom duty,
erection cost and the insured undertakes to increase or decrease the amount of insurance in the
event of any material fluctuation in the level of wages or prices. Provided always that such
increase or decrease shall take effect only after the same has been recorded on the policy by
the Company.

If in the event of the occurrence of a loss, or damage it is found that the Sum insured
representing the completely erected value of the property and/or of particular item involved is
less than the amount required to be insured, then the amount recoverable by the insured under
this policy shall be reduced in such proportion as the Sum Insured bears to amount required to
be insured.

Memo 2 - PREMIUM ADJUSTMENT –

The Sum Insured under the Policy representing the complete value of the contract works shall
be adjustable at completion of the construction on the basis of actual values to be declared by
the insured in respect of freight and handling charges, customs dues and construction cost and
difference in premium shall be met with by payment at the rate agreed to or by the insured as
the case may be. Any increase or decrease in the Prime cost of materials shall not be the
subject matter of premium adjustment.

Memo 3 - REINSTATEMENT OF SUM INSURED –

In the event of loss or damage the Insurance shall notwithstanding be maintained in force during
the period of insurance for the Sum Insured the Insured undertaking to pay a pro-rata additional
premium on the full amount of each claim for the loss or damage from the date of such loss to
the expiry of the period of Insurance.

Memo 4 - BASIS OF LOSS SETTLEMENT –

In the event of any loss or damage the basis of any settlement under this Policy shall be -

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a) in the case of damage which can be repaired the cost of repairs necessary to restore the
property to their condition immediately before the occurrence of the damage less salvage,
or

b) in the case of a total loss - the actual value of the property immediately before the
occurrence of the loss less salvage;

however, only to the extent the cost claimed has to be borne by the Insured and to the
extent they are included in the Sum Insured and provided always that the provisions and
conditions have been complied with.

All damages, which can be repaired, shall be repaired, but if the cost of repairing any
damage equals or exceeds the value of the property immediately before the occurrence of
the damage, the settlement shall be made on the basis provided for in (b) above.

The cost of any provisional repairs will be borne by the Company if such repairs constitute
part of the final repairs and do not increase the total repair expenses.

The cost of any alterations, additions and/or improvements shall not be recoverable under
this Policy.

Memo 5 - EXTENSION OF COVER –

Any extra charges incurred for overtime, work on holidays, express freight (excluding air freight)
are not covered by this insurance unless agreed upon at an additional premium to be prescribed
by the Company.

Memo 6 - CONSTRUCTION PLANT AND MACHINERY –

Loss of or damage to Construction Plant and Machinery excludes loss or damage directly
caused by its own explosion or its own mechanical or electrical breakdown or derangement.

Memo 7 - SURROUNDING PROPERTY –

Loss of or damage to property located on or adjacent to the site and belonging to or held in care
custody or control of the Principal (s) or the Contractor(s) shall only be covered if occurring
directly due to the construction of the items insured under Section I and happening during the
period of cover, and provided that a separate Sum therefore has been entered in the Schedule
under Section I, for Principal’s surrounding specified property. This cover does not apply to
construction/erection machinery, plants and equipment.

Memo 8 - MAJOR PERILS/AOG Perils –

The major peril/Acts of God claims shall mean claims arising out of –

a) Earthquake - Fire & Shock

b) Landslide/Rockslide/Subsidence
c) Flood/Inundation
d) Storm/Tempest/Hurricane/Typhoon/Cyclone/Lightning or other atmospheric
disturbances.
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e) Collapse
f) Water damage for ‘wet’ risks i.e. contract involving works in rivers, canals, lakes or sea.
Memo 9. REINSTATEMENT OF THE INDEMNITY LIMIT -

Reinstatement of the indemnity limit on payment of additional premium after occurrence of claim
can be allowed for extensions like express freight, overtime, surrounding property, airfreight.
However, in respect of Third Party Liability, reinstatement can be allowed upto overall limit of
Rs.1 crore during entire Policy period.

Memo 10. THIRD PARTY LIABILITY -

Third party liability (TPL) cover cannot be granted during extended maintenance.

SECTION II - THIRD PARTY LIABILITY -

The company will indemnify the insured against -

a) legal liability for accidental loss or damage caused to property of other persons including
property held in trust by or under custody of the Insured for which he is responsible
excluding any such property used in connection with construction thereon.

b) legal liability (liability under contract excepted) for fatal or non-fatal injury to any persons
other than the Insured's own employees or workmen or employees of the owner of the
works or premises or other firms connected with any other construction work thereon, or
members of the Insured's family or of any of the aforesaid; directly consequent upon or
solely due to the construction of any property described in the Schedule.

Provided that the total liability of the Company during the period of Insurance under this
cause shall not exceed the limits of Indemnity set opposite thereto in the Schedule.

In respect of a claim for compensation to which the indemnity provided herein applies, the
Company will, in addition, indemnify the Insured against -

a) all costs and expenses of litigation recovered by any claimant from the Insured,

b) all costs and expenses incurred with the written consent of the Company.

The exclusion contained in paragraphs (d), (f) & (g) in Section I of this Policy shall apply also to
this Section.

EXCLUSIONS TO SECTION II -

The Company will not indemnify the Insured in respect of -

1. The Excess stated in the Schedule to be borne by the Insured in any one occurrence
related to property damage.
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2. Expenditure incurred in doing or redoing or making good or repairing or replacing anything
covered or coverable under Section I of this Policy;

3. Liability consequent upon -

a) bodily injury to or illness of employees or workmen of the Contractor(s) or the

Principal(s) or any other firm connected with the project which or part of which is insured
under Section I, or members of their families;

b) Loss of or damage to property belonging to or held in care custody or control of the

Contractor(s), the Principal(s) or any other firm connected with the project which or part
of which is insured under Section - I, or an employee or workman of one of the
aforesaid;

c) any accident caused by vehicles licensed for general road use or by waterborne vessels
or aircraft;

d) any agreement by the Insured to pay any sum by way of indemnity or otherwise unless
such liability would have attached also in the absence of such agreement.

CONDITIONS APPLYING TO SECTION II -

1. No admission, offer, promise, payment or indemnity shall be made or given by or on behalf

of the Insured without the written consent of the Company who shall be entitled, if they so
desire, to take over and conduct in the name of the Insured the defence or settlement of any
claim or to prosecute for their own benefit in the name of the Insured any claim for indemnity
or damage or otherwise and shall have full discretion in the conduct of any proceeding or in
the settlement of any claim and the Insured shall give all such information and assistance as
the Company may require.

2. The company may, so far as any accident is concerned, pay to the Insured the limit of
indemnity for anyone accident/ anyone period, but deducting therefrom in such case any
sum/s already paid as compensation in respect thereof or any lesser sum for which the
claim or claims arising from such accident can be settled and the company shall thereafter
be under no further liability in respect of such accident under this section.
PART 1- RATE SCHEDULE FOR CONTRACTORS' ALL RISKS INSURANCE
HAVING SUM INSURED UPTO RS.100 CRORES

Excess - 5 %
Risk Premium Rates (%o) of claim amount subject
S. Risk
Code to Minm of Rs.
No
Minm Rate Addl. Rate per AOG/Major
upto first 3 month beyond Normal Perils/
months 3 months Collapse
(1) (2) (3) (4) (5) (6) (7)
1. Residential and commercial buildings, Office buildings, Schools, Universities, Hotels,
Motels, Restaurants, Hospitals, Airport buildings of –

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 011011 a) Other than RCC and not
more than 2 storeys 1.00 0.02 3,000/- 10,000/-

012032 b) Other than RCC and

exceeding 2 1.75 0.025 5,000/- 20,000/-
storeys and upto 5
storeys
RCC framed structure
013022 c) not more than 5 storeys 1.50 0.025 5,000/- 20,000/-

014043 d) RCC Framed structure

above 5 storeys and upto 2.00 0.03 5,000/- 20,000/-
10 storeys

-- e) RCC Framed structure

above 10 storeys and 2.25 0.035 5,000/- 20,000/-
upto 15 storeys

016096 f) RCC Framed structure

above 15 storeys and 3.00 0.05 50,000/- 2,00,000/-
upto 25 storeys

017106 g) RCC Framed structure

above 25 storeys and 3.25 0.05 50,000/- 2,00,000/-
upto 30 storeys

--- h) RCC Framed structure

above 30 storeys and 3.50 0.05 50,000/- 2,00,000/-
upto 40 storeys

--- i) RCC Framed structure

above 40 storeys and 3.75 0.05 50,000/- 2,00,000/-
upto 50 storeys

--- j) RCC Framed structure

above 50 storeys and 4.00 0.05 50,000/- 2,00,000/-
upto 60 storeys
2. Theaters, Auditorium and Cinema Halls -

021041 a) Height not exceeding 22

m and span not 2.00 0.02 3,000/- 10,000/-
exceeding 10 m

022043 b) Height not exceeding 22

m and span exceeding 2.00 0.03 5,000/- 20,000/-
10 m

023063 c) Height exceeding 22 m

and span not exceeding 2.25 0.03 10,000/- 40,000/-
10 m

024073 d) Height exceeding 22 m

and span exceeding 10 2.50 0.03 10,000/- 40,000/-
m

3. Factory sheds, Warehouses, Cold storages, Hangars –

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 031061 a) Other than RCC 2.25 0.02 10,000/- 40,000/-
construction

032041 b) RCC 2.00 0.02 5,000/- 20,000/-

033051 c) Hangars having walls of I)

RCC or ii) Rolled steel in 50 2.125 0.02 10,000/- 40,000/-
mm thick concrete or 100
mm thick masonry with
panel walls of RCC, burnt
bricks, stone or concrete
bonded in cement and/or
lime mortar and having
roof of combination of RCC
and GI/ Aluminium/AC
Sheets on steel RCC
framework.

4. Chimneys, Silos and Cooling Towers (other than hyperbolic or natural draught type) TV Towers -

041072 a) Upto 15 m height and

exceeding 10 m 2.50 0.025 10,000/- 40,000/-
diameter.

042115 b) Exceeding 15 m height

and exceeding 10 m 3.50 0.04 10,000/- 40,000/-
diameter.

043128 c) Hyperbolic or Natural

draught cooling tower 4.00 0.105 1,00,000/- 2,00,000/-

5. Roads –

051042 a) In townships only 2.00 0.025 5,000/- 20,000/-

052073 b) In Plain Areas 2.50 0.03 5,000/- 20,000/-

053095 c) In Hilly/Ghat areas 3.00 0.04 10,000/- 40,000/-

Notes – 1. Where value of culverts and Road bridges does not exceed 20 % of the contract value, the same may
be deemed as covered at the above rates. Where the value exceeds 20 %, the proposal shall be rated
as per Tariff Item ‘Culverts and Canals’ (not involving works in water).

2. Where the tunnel value exceeds 10% of the contract value, a reference should be made to Tariff
Advisory Committee (Engg. sub-committee) for rate of premium to be charged in addition to the above
rates.

061097 6 Interior decoration works 3.00 0.10 10,000/- 40,000/-

071042 7 Runways, Aprons and Air

Taxiways at Airports. 2.00 0.025 5,000/- 20,000/-
-- 8 Flyovers on Land -

081073 a) Span not exceeding 15 2.50 0.03 5,000/- 20,000/-

m

082095 b) Span exceeding 15 m 3.00 0.04 10,000/- 40,000/-

--- 9 Subways on Land –

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 091073 a) Width not exceeding 15 2.50 0.30 5,000/- 20,000/-
m

092095 b) Width exceeding 15 m 3.00 0.40 10,000/- 40,000/-

10. Road bridges on land made of –

101096 a) Steel 3.00 0.05 5,000/- 20,000/-

102116 b) RCC or Pre-stressed 3.50 0.05 10,000/- 40,000/-

concrete

103136 c) Other materials 5.00* 0.10* 20,000/- 80,000/-

* Provisional rates, reference to be made to TAC for final rate quotation.

11. Bridges on rivers/creeks, dams/coffer dams, aqua ducts, via-ducts, barrages, structure works in
water –

111127 -- Weir-cum-causeway 6.00 0.10 1,50,000/- 5,00,000/-

Note - In respect of bridges, the above rates will be applicable only when both sub- structure and super-structure
are covered. Otherwise reference should be made to the TAC.

12. (I) Reservoirs/Tanks of materials (Other than steel) –

121093 a) Surface and under 3.00 0.30 5,000/- 20,000/-

ground

122115 b) Overhead 3.50 0.40 5,000/- 20,000/-

(II) Reservoirs/Tanks of steel –

123062 a) Surface and under 2.25 0.025 5,000/- 20,000/-

ground

124073 b) Overhead 2.50 0.03 5,000/- 20,000/-

13. Tunnels –

131157 I Above sea level 7.00 0.10 2,00,000 5,00,000

132167 II Below sea level 10.00 0.10 4,00,000 8,00,000

133147 -- Bridges on rivers/ creeks,

Dams, Coffer dams etc. 6.00 0.10 1,50,000 5,00,000
14. Laying of oil/gas pipelines -

140001 a) On Land Provisional rate Rs.15 per mille

140002 b) Under Sea or River Reference to be made to TAC for final rate quotation.
15. Water supply -

151043 -- Water Supply Installations

for housing colonies 2.00 0.03 3,000 10,000
including pump house with
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 pumps, valves and piping
and water supply
lines but excluding water
storage tanks

Note - Laying of Water Pipelines Water Supply Scheme - to be rated as per EAR tariff (Cir. No. EAR/45/97-16
dated 11-6-97)

16. Sewage disposal –

161043 -- System for Housing

Colonies including Pump 2.00 0.03 3,000 10,000
house with pump, sewage
treatment Plant, holding
ponds, sewer/ drainage
lines and storm water drains
& Channels

171073 17 Underground and overhead

water storage tanks for 2.50 0.03 3,000 10,000
residential/ comm.- ercial
buildings and housing
colonies

181013 18 Ground leveling and area

reclamation work 1.00 0.03 3,000 10,000

191011 19 Fixing of pre-cast RCC

Parts for buildings, const- 1.00 0.02 3,000 10,000
ruction of
compound wall and
weather sheds for existing
building/ apartments

201011 20 Other sundry works for

residential/ commercial 1.00 0.02 3,000 10,000
buildings like water proofing
plastering of walls

211137 21 All other risks not 5.00* 0.10* 20,000* 80,000*

covered above

221089 22 Under ground cable 2.75 0.50 20,000 80,000

ducting

231128 23 Natural Draught 4.00 0.105 1,00,000 2,00,000

Cooling Towers

241116 24 Pile Foundations alone in

respect of buildings & other 3.50 0.05 1,00,000 2,00,000
structures

251087 25 Canals/ culverts (Not 2.75 0.10 20,000 80,000

involving works under water)

Note - Refer Item -5 (Roads) for canals / culverts forming part of the Road construction

260000 26 Railway Gauge conversion 3.00 0.03 10,000 40,000

(Meter gauge to Broad
gauge)

270000 27 Acquaculture Project: Laying of HDPE Pipes/Accessories for Sea Water Intake Systems for

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 Acquaculture Project - to be rated as “Works in Water”

Note - Circular No Engg/Gen-24/2000-2 dtd 29-3-2000 - By this decision, it is allowed to cover the ‘Exclusion-C-
Section-1’ which excludes losses arising out of ‘breakage of glass’ among other things as indicated in
the exclusion-c) by payment of additional premium.

i) CAR rate so worked out as per tariff provision should be loaded by 25 %

ii) Excess on glass items shall be 10% of aggregate Sum Insured of all glass items.

PART-II GENERAL REGULATIONS

1. JURISDICTION –
This applies to all Risks located in India, for which the value of the Civil Works involved is
more than 50 % of the total contract value.

2. SCOPE -
3. SUM INSURED -
For the purpose of these regulations the Sums Insured on the following items are to be
taken into account for arriving at total Sum Insured for CAR Insurance –
a) Marine (Imports)- Landed cost at site
b) Marine (Indigenous)- Landed cost at site
c) Cost of Construction
d) Permanent Civil Engineering Works
e) Half the escalated value, if escalation is opted for.
f) Preoperative expenses
4. MARINE/TRANSIT RISKS -

Where Marine/Transit Insurance connected with Contractor’s All Risks Insurance of any
project is placed in India simultaneously or later on in one combined policy or under
separate policies, in one department or in different departments, the matter relating to
Contractors All Risks Cover is required to be underwritten, subject to these General
Regulations.

The loss due to breakage of glass can, however, be covered by payment of

additional premium as follows -

i) CAR rates so worked out as per tariff provisions should be loaded by 25 %

ii) Excess on glass items shall be 10 % of aggregate sum insured of all glass items.

5. SUB-CONTRACTS FORMING PART OF A PROJECT -

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 As regards Sub-Contracts forming part of a project, it is clarified that irrespective of
whether the project value has been broken into various sections and orders/contracts
are placed with different suppliers/contractors/Sub-Contractors OR the Insureds carry
out the work themselves departmentally, the Insurances for all such Sub-Contracts are
subject of these General Regulations.
6. COMPUTATION OF PREMIUM

Premium shall be computed for the total period commencing from

i) Commencement of work OR
ii) Date of arrival of the first consignment at the site of erection
whichever is earlier.

7. STORAGE RATE AT FABRICATORS PREMISES/WORKSHOP:

This is an extension to CAR Policy and can be covered.

Storage Rate – Re. 0.30 per mille per annum or part thereof
Excess Rs. 1500 each claim.

8. ADDITIONAL RATES FOR EARTHQUAKE (FIRE & SHOCK) PERILS -

Irrespective of the Sum Insured for CAR the following additional rates are to be charged
over the CAR Rate for risks located in Earthquake Zone (as defined in the Fire Tariff).

Zone Applicable rate (%o) per annum

Zone - I 1.00
Zone – II 0.50
Zone – III Nil
Zone – IV Nil
Notes -

a) These additional rates take care of Earthquake (Fire and Shock) perils only.
b) These additional rates are to be charged on pro-rata basis for period shorter than one
year.
c) All Acts of God perils other than Earthquake (Fire and shock) are taken care of in
the CAR Rates prescribed. However no reduction in the rates can be allowed for
excluding any of these perils.
d) The Additional rates mentioned above (namely Rs.1.00 % per annum for risks located
in Earthquake Zone I and 0.50 % per annum for risks located in Earthquake Zone II) are
to be charged for the total CAR period (Including all extensions).
e) Earthquake cover is optional in both the Zones I & II but this cannot be opted mid-term
or for part of the total CAR period. Thus these extras (viz Rs.1.00 per mille per annum
for Risks in Zone I and Rs. 0.50 per mille per annum for risks in Zone II) are to be
charged for total CAR period (including all extensions).
9. MID-TERM INCREASE IN SUM INSURED DURING POLICY PERIOD -

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 In cases where the Sum Insured for CAR is required to be increased during the policy
period, the premium should be collected on the additional Sum insured at applicable CAR
rates. It is not permissible to charge pro-rata premium on such increased sum insured.
Mid-term increase in SI shall be affected only after the same has been recorded in the policy
by the Company before the occurrence of any claim.
In such cases no Volume Discount shall be applicable.
10. EXCESS FOR CLAIMS ARISING OUT OF ‘ACTS OF GOD PERILS’ –
a) Column No. 7 of the Part- I - Rate Schedule prescribes minimum excess amount for
Collapse Claims and Claims arising out of AOG Perils (viz. Earthquake/Fire and
Shock/Landslide/Rock-slide/Subsidence, Flood/ Inundation/ Storm/ Tempest/ Hurricane/
Typhoon /cyclone).
For risks situated in Earthquake Zone I and II the minimum excess for claims arising out
of AOG perils shall be as under during the entire policy period (including all extensions)
–

Zone – I Rs. 25,000/- per claim

Zone – Rs. 10,000/- per claim
II

B) For risks situated in Earthquake Zone III and IV the minimum excess for claims arising
out of AOG perils shall be the excess prescribed in Column No. 7 of Rate Schedule.
The excess amounts shall apply separately to each incident giving rise to loss or
damage and for this purpose a incident shall not be considered to have terminated until
there have been seven consecutive days freedom from the perils concerned and only
thereafter will this excess amount apply afresh.
C) In respect of those CAR Risks located in Earthquake Zone I or II where clients do not
require the cover for Earthquake Perils, the excess amount applicable for all
AOG perils other than Earthquake (Fire and Shock) will be the same as prescribed in
Column No. 7 of the Rate Schedule.
D) In respect of those CAR Risks where the excess prescribed in Column No. 7 of the
Rate Schedule is higher than excess amounts prescribed above for Zone I and II (viz.
Rs. 25,000/- per claim for Zone I and Rs. 10,000/- per claim for Zone II) the higher of the
two excesses should be applied in respect of AOG Claims.
11. DISCOUNT FOR HIGHER EXCESS & VOLUME DISCOUNT -
A) All rates for Contractor’s All Risks Insurance are subject to minimum Excess per claim
and separately for (a) Normal (b) AOG/Collapse Claims as prescribed.

Discounts for opting Higher Excesses (both for Normal and AOG/Collapse Claims at the
same time) can be allowed in the CAR rate (as per Rate Schedule) as per the following
Scale –

Excess Discount in Premium

2 times the minimum Excess 5%

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 5 times the minimum Excess 10 %
10 times the minimum Excess 20 %
20 times the minimum Excess 30 %

B) Earthquake rates and premiums for risks located in Earthquake Zones I and II are
distinct from the Rates and Premiums applicable to 'All Risks’ portions of the CAR
Cover, it is permissible to grant discount as per following scale in the Earthquake
premium alone.

Earthquake Excess increased to - Discount in Earthquake premium

2 times the minimum Excess 5%
5 times the minimum Excess 10 %
10 times the minimum Excess 20 %
20 times the minimum Excess 30 %

Notes – 1. These discounts in the Earthquake premium only, can be allowed

irrespective of whether the increased Excesses for Normal/Collapse Claims
are opted or not for the CAR Cover.

2. The higher Earthquake Excess will qualify for discounts in the Earthquake
premium only and not in the CAR premium, for which the provisions under
Item No. (A) above would continue to apply.
C) The discounts applicable in the CAR Rate and/or the Earthquake premium as explained
in (A) and (B) above for selection of higher Excess amounts are also applicable, as
under, during any Extensions in the policy period -

i) in the extension Rates prescribed of the General Regulations; and

ii) in the additional rates during Extension period for Earthquake (Fire & Shock) perils
prescribed under General Regulations.

12. CLEARANCE AND REMOVAL OF DEBRIS -

The rate applicable for Contractor's All Risks cover is to be charged on the limit of Sum
Insured fixed for ‘Clearance and Removal of Debris'.

The Policy Excesses (Normal & AOG/Collapse) should apply for the 'Clearance and
Removal of Debris' claims.

13. THIRD PARTY LIABILITY COVER -

The rate as applicable for CAR Cover is to be charged for Third Party Liability Cover, upto
the following limits -

For Policies with sum insured upto Rs. 10.0 Crores -

Any one person;

Any one accident; Upto Rs, 1.00 Crore
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 During the entire period of CAR cover

For policies with sum insured above Rs. 10.0 Crores -

Any one person; 10 % of the completely erected value or

Any one accident; Rs. 10.0 Crores whichever is lower.
During the entire period of CAR cover

Notes -
i) Third Party Liability Insurance in excess of above-mentioned limits should be under
written in the Miscellaneous Department at the discretion of the Insurer.
ii) The Policy Excesses (Normal & AOG/Collapse Claims) should apply for Third Party
Liability Property Damage Claims.
iii) For Third Party Liability Claims arising out of Acts of God Perils the Excess
applicable to AOG claims should be applied.

iv) The Sum Insured for TPL Cover cannot be reinstated after occurrence of a loss. The
Tariff extension rate shall apply for TPL cover also during extension period. When
different sections of the contract works are covered for different extension periods
under the policy, the highest of such Tariff extension rates shall be charged for TPL
cover during extension.
v) The TP Liability cover cannot be granted during extended maintenance

14. SURROUNDING PROPERTY OF THE INSURED -

For covering the specified Surrounding Property of the Insured the rate applicable will be 50
% of the CAR rate and this is to be charged on the limit of Sum Insured fixed for the
Surrounding Property.
The Policy Excesses (Normal & AOG/Collapse Claims) should apply for Surrounding
Property also.
15. ESCALATION PROVISION -
Escalation Benefit will be limited to a maximum of 50% of the sum insured for CAR (the
escalation limit may be expressed either in percentage or in amount) and will be permitted only
once at the time of inception of the CAR Policy.

Additional Premium is to be charged for `Escalation Provision' at the rates prescribed for
CAR but on the 50% of the amount of escalation. The method of premium calculation will
be as under –
a) Assume the Project Sum Insured ... Rs. 4 Crores
b) Assume Escalation percentage is 10 % i.e. Rs. 40 Lakhs
c) Additional Premium to be charged at the
prescribed rate for CAR cover will be on
50 % of the Escalation Pro- visional
cover i.e. on. ... Rs.20 Lakhs

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16. ADDITIONAL RATE FOR EXPRESS FREIGHT (AIR FREIGHT EXCLUDED) HOLIDAY
AND OVERTIME RATES OF THE WAGES -
The additional premium for covering Express Freight (Air Freight excluded), Holiday and
Overtime Rate of Wages, will be at the basic CAR Rate (excluding extras for Earthquake,
etc.) to be applied on the limit selected.

17. ADDITIONAL RATE FOR AIR FREIGHT ONLY – ( refer Endt. For Air Freight )

The Rate and excess as under shall be charged exclusively for items of Air Freight only and
subject to the limit selected by the Insured for Indemnity against Air Freight only –

Rate . . . 5 % on the amount of indemnity selected

Excess . . . 5 % of the Air Freight incurred per claim

The Endorsement Wording for covering the Air Freight will be as under --
‘It is hereby declared and agreed that the Policy shall also indemnify towards Air Freight
incurred by the Insured in connection with the idemnifiable loss under the Policy.
In consideration thereof an additional premium of Rs._______ is charged hereby. Limit
of indemnity shall be Rs.______ during currency of the Policy.
Each and every claim shall be subject to a minimum Excess of 5 % of the Air Freight
incurred over and above the excess as applicable under the policy. Subject otherwise to
terms, conditions and exceptions of the policy’.
a) ADDITIONAL CUSTOM DUTY -
The cover for Additional Custom Duty will be subject to the following rates, terms and
conditions -

a) the cover for Additional Custom Duty will be on First Loss Basis,
b) The specific limit for Additional Custom Duty-either in percentage or in amount - has to
be selected by the Insured at the inception of the Policy and can be reinstated in the
event of loss,
c) The rate and excess will be as under -

Rate 2 % to be charged on the Additional Custom Duty amount selected.

Excess 5 % of the admissible Custom Duty incurred, in addition to the Excess

amount applicable for the affected item under the policy.

d) Following endorsement wording to be used for the purpose -

‘In consideration of the Insured having paid an additional premium of Rs._______, It
is hereby declared and agreed that the insured shall also be indemnified during the
currency of this policy, towards the additional Custom Duty amount of Rs.______
which may be incurred by the Insured over and above the Custom Duty amount
taken into account in arriving at the Sum Insured of the affected item.

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 Each and every claim payable under this extension shall be subject to an Excess of
5 %of the admissible Additional Custom Duty incurred and will be in addition to the
excess amount applicable for the affected item under the policy.
The Indemnity for such Additional Custom Duty will stand reduced after occurrence
of the claim unless reinstated by payment of an additional premium prescribed by the
Company. Subject otherwise to the terms, conditions and exceptions of the policy’.
18. CONSTRUCTION MACHINERY PLANTS AND EQUIPMENTS -
A separate Sum Insured is fixed for CPM equipments used for such projects.
i) Sum Insured of CPM does not exceed 5 % of CAR Sum Insured -
Where the Sum Insured for CPM equipments does not exceed 5 % of SI for CAR
Insurance, or Rs. 25 lakhs whichever is lower, the same can be covered under the CAR
policy and at rates and excesses applicable for CAR.
ii) Sum Insured of CPM exceeds 5 % of CAR Sum Insured -
Where the Sum Insured for CPM equipments exceeds 5% of SI for CAR Insurance, or
Rs. 25 lakhs whichever is lower, the same should be separately covered under the
Contractor’s Plant and Machinery Insurance Policy and at rates and excesses as
applicable for CPM Insurance.
19. RATES FOR EXTENSION BEYOND POLICY PERIOD -

Normal Period Rate per mille

i) 1 month or part thereof 0.30

ii) Exceeding 1 month but not exceeding 2 months 0.50
iii) Exceeding 2 months but not exceeding 3 months 0.75
iv) Exceeding 3 months but not exceeding 6 months 1.20
v) Exceeding 6 months but not exceeding 9 months 1.75
vi) Exceeding 9 months but not exceeding 12 months 2.00
vii) Exceeding 12 months but not exceeding15 months 2.25
viii) Exceeding 15 months but not exceeding18 months 2.50
ix) Exceeding 18 months but not exceeding 21 months 2.75
x) Exceeding 21 months but not exceeding24 months 3.00
xi) 30 months* 3.00 + (30-24)/24 = 3.25
xii) 36 months* 3.00 + (36-24)/24 = 3.50
xiii) 42 months* 3.00 + (42-24)/24 = 3.75
xiv)48 months* 3.00 + (48-24)/24 = 4.00
and so on for longer extensions.

* Circular no. Engg/Gen-4/24/2000-15, dated October 6, 2000

Irrespective of the number of extensions availed of by the Insured the above extension
rates will apply for each extension.

For risks located in Earthquake Zones Pro-rata extra of the additional rates for Earthquake
(Prescribed under Item No.7 of General Regulations will also apply for Extension Periods
beyond policy period, in addition to the Normal Extension Rates for CAR Cover prescribed
above.
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20. CLAIMS DISCOUNTS LOADING ON CAR EXTENSION RATES -

For all proposals having Sum Insured above Rs 100 Crores, loading/discount shall apply on
extension rates under CAR Tariff depending on the claims experience under the policy at
the time of extension.

Claims experience as on date of extension Discount/Loading

Upto 10 % 20 %
more than 10 % upto 30 % 15 %
more than 30 % upto 60 % 10 %
more than 60 % upto 100 % Nil
more than 100 % upto 200 % + 10 %
more than 200 % upto 300 % + 20 %
more than 300 % + 30 %

Notes -
i) The above discount/loading for extensions to such policies will be applicable only to the
project risks with SI above Rs.100 Crores.
Extensions to project risks with SI below Rs.100 crores will not be eligible for any
discount/loading

ii) Maximum discount allowable on CAR rate is 60 % ie. The final rate after all discounts
are applied should not be less than 40 % of the basic CAR rate
21. MAINTENANCE VISITS AND EXTENDED MAINTENANCE COVER -
The policy can be extended to cover the Maintenance Visits and Extended Maintenance.
The endorsement wordings and rates and excess for those will be as under -

i) Limited Maintenance Visits covers Cover -

In consideration of the payment of additional premium by the insured (which is included

in the total premium set forth in the schedule) it is hereby declared and agreed that the
indemnity provided by this policy is extended to include Maintenance Cover for the
period of _______ months to be reckoned from the date of completion or handing over
provided the policy period has been extended till completion or handing over. However,
during Maintenance Period this Insurance shall cover solely loss of or damage to the
contract works caused by the insured contractor(s) in the course of the operations
carried out for the purpose of complying with the obligations under the maintenance
provisions of the contract.
ii) Extended Maintenance Cover --

In consideration of the payment of an additional premium by the insured (which is

included in the Total Premium set forth in the Schedule), it is hereby declared and
agreed that the indemnity provided by the policy is extended to include Maintenance
Cover for the period of ____________ months to be reckoned from the date of

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 completion or handing over, provided the policy period has been extended till completion
or handing over. However, during the Maintenance Period this insurance shall cover loss
or damage to the contract works -
a) caused by the Insured contractor(s) in the course of the operations carried out for
the purpose of complying with the obligations under the maintenance provisions of
the contract.
b) occurring during the maintenance period provided such loss or damage was caused
on the site during the erection period.
The rates and Excesses applicable for Maintenance Cover for 6 &12 months will be
as under –

Rate Rs. per mille

Cover
for 6 months for 12 months

i) Maintenance Visits Cover 0.25 0.50

ii) Extended Maintenance Cover 0.50 1.00

Note - Charging premium on pro-rata basis for periods less than 6 months, or 6 to12
months shall not be allowed.
iii) ‘Extended Maintenance Cover’ (beyond 12 months) -

Extended Maintenance Cover could be given for any period longer than 12 months, as
required under the contract at the rates prescribed under the Tariff at present. i.e.
Re.1.00 per mille per annum. (Circular no. Engg/73-1/99/14, dated Sept. 28, 1999). This
provision is effective from 1/10/99.
iv) Extension of CAR Policy for Maintenance Visits and Extended Maintenance Cover

In case deletion of Maintenance Visits/Extended Maintenance Cover availed at the

inception of CAR policies before attachment of the risk, refund of premium may be given
by retaining 25 % of the premium under this extension. In case the risk is attached no
refund shall be allowed for deletion of Maintenance Visits/ Extended Maintenance Cover.

22. REFUND OF PREMIUM FOR EARLY COMPLETION OF THE PROJECT -

Refund of premium, arising out of cancellation of policies under CAR insurance due to
abandonment of project, double insurance of same project etc. or refund of premium due to
early completion earlier than the period mentioned in policy Schedule (including testing in
respect of CAR policies) whether rated by the Insurer or TAC can be allowed provided the
following conditions are fulfilled (Circular no. Engg/Gen-4-III/Gen-24-VII/99-4, dated Feb. 24,
1999)–

i) The period of insurance is 18 months and above;

ii) Notice for early completion being given in advance to the insurer before completion of
the project.
iii) claims experience under the policy being less then 60

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 iv) The original policy period is not exceeding the contract period as per contractual clause.
In the absence of the existence of the contract, the scheduled project period as per
original bar chart should be the policy period.

The minimum period for which refund can be claimed shall be 3 months.

23. REFERENCE TO Tariff Adv. Committee (TAC) -

Any proposal on Contractor's All Risks Insurance with sum insured upto Rs.1,500 crores
shall be rated as per Tariff. Reference will be made only in case of doubt.

24. PROVISIONAL RATE QUOTATIONS FOR CAR INSURANCE (HAVING SUM-INSURED

OVER RS.100 CRORES) -

Provisional Quotations (if any) to the clients for CAR Insurances having sum insured upto
Rs. 1,500 Crores to be made on the following basis of these General Regulations and a
reference to be made to TAC (Engineering Sub-Committee) for final fixing of rates and
terms.

25. PROVISIONAL RATE -

Any Provisional Rate Quotations for CAR Insurances having Sum Insured upto Rs.1500
crores, not consistent with the above, will be treated as breach of Tariff and dealt with
accordingly.

26. BREACH of TARIFF -

Any Rate Quotations for CAR Insurances not consistent with this Tariff will be treated as
Breach of Tariff and dealt with accordingly.

27. GROSS RATES -

All Rates specified in the Tariff are Gross Rates and Agency Commission (or discount in
lieu of Agency Commission) can be allowed from these Gross Rates, as per Rules
Prescribed by General Insurance Corporation of India from time to time.

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 ANNEXURE

ENDORSEMENTS -
Following endorsements shall be attached to the policies whenever applicable -
1. PIPELINE CONSTRUCTION -
Notwithstanding the conditions and provisions and endorsements of the policy, it is
understood and agreed that the following special conditions shall apply -
a) Excavated material shall be deposited at least one meter away from the trench.
b) The length of trenches totally or partially opened at any one time shall never exceed in
respect of any one work face __ meters all work faces’ combined total ____ meters.
c) Pipe shall be secured against heaving or floating up by covering them sufficiently and as
soon as practicable.
d) The open ends of pipes shall be provisionally sealed at the end of each working day or
in the event of immediate danger of flooding, otherwise expenses for clearing and
cleaning of mud-filled pipeline sections shall not be indemnified.
e) Loss or damage arising from pressure testing producing tensions exceeding the yield
point guaranteed by the manufacturer shall not be covered.
f) Loss of testing media shall not be covered.
g) Cost incurred in searching for leaks are indemnified -
- up to but not exceeding the limit per event of ________________
- up to an aggregate limit for the policy period of ________________
however only if the leaks are a consequence of an insured event.
h) The Insurer is not liable for any claims due to pollution from any cause whatsoever.
2. EXCLUSION OF LOSS OF STABILISING FLUID -
Notwithstanding the conditions, provisions and other endorsements of the policy, it is agreed
and understood that the Insurers shall not be liable to indemnify the Insured in respect of
loss of bentonite or other stabilising fluid even if the quantity of losses originally expected is
exceeded.
3. ROAD CONSTRUCTION --
It is hereby warranted and agreed that, notwithstanding anything contained in this policy to
the contrary, the following special conditions shall apply -

The length of the working area (excavation and construction of coffer etc., however except
final surfacing) shall never exceed _____ meters at any work face and a total of _______
meters at all work faces combined.

4. PILING CONSTRUCTION -

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 Notwithstanding the conditions, provisions and other endorsements of the Policy, it is
agreed and understood that the Insurers shall not be liable to indemnify the Insured in
respect of -

a) Loss of or damage to piles and/or casings due to misplacement, jamming and/or

extraction thereof.
b) Costs incurred in case of abandoned piling work, for any reasons not related to
accidental loss or damage and mainly due to unforeseen ground conditions when piles
cannot be driven to the required depth.
5. ABANDONMENT OF SHAFTS -
It is hereby agreed and declared that, notwithstanding anything contained in the contrary,
this endorsement excludes any loss or damage resulting as a consequence of shaft being
abandoned due to any reason whatsoever.
6. CROPS, FORESTS, CULTIVATED AREAS -
Notwithstanding the conditions, provisions and other endorsements of the Policy, it is
agreed and understood that the Insurers shall not be liable to indemnify the Insured in
respect of any loss, damage or liability directly or indirectly caused to crops, forests and/or
other cultures during the execution of the contract works.
7. EXISTING UNDERGROUND CABLES -
Notwithstanding the conditions, provisions and other endorsements of the Policy, it is
understood and agreed that the following special conditions shall apply -
The Insurers shall not be liable under the Policy to indemnify loss or damage to existing
underground cables or pipes of any kind (electric cables, telephone cables, water and gas
pipes, sewers and other pipelines, etc.) unless prior to the commencement of works -
- the Insured had requested and obtained from the public authorities or the owners of such
an underground system the exact position of all cables or pipes.

- the Insured had traced their existence and indicated location.

The indemnity shall in any case be restricted to the repair costs of such cables or pipes. Any
consequential damage shall be excluded from the policy cover.
8. CONTRACT WORKS TIME SCHEDULE -
Notwithstanding the conditions, provisions and other endorsements of the Policy it is
understood and agreed that -
a) The contract works time schedule together with plans, documents and specifications
supplied and any other statements made by the Insured with respect of works
programme is deemed to be incorporated herein.
b) The Insurers shall not indemnify the Insured in respect of loss or damage caused by, or
arising out of, or aggravated by deviations from the contract works time schedule
exceeding four weeks, unless the Insurers had agreed in writing to such a deviation
before a loss occurred.
This memo applies only to the dam works during period of river diversion.

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9. TEMPORARY ACCESS ROADS -

Irrespective of the periods of Insurance specified in the Policy, the Insurer will indemnify the
Insured only for unforeseen accidental loss or damage to temporary access roads insured
under the Policy if such loss or damage occurs prior to such roads being completed or taken
into use for their purpose by the contractors, whichever takes place first.

10. SPECIAL CONDITIONS CONCERNING THE CONSTRUCTION OF DAM AND WATER

RESERVOIR -

It is agreed and understood that otherwise subject to the terms, exclusions, provisions and
conditions contained in Policy or endorsed thereon the Insurers will not indemnify the
Insured in respect of -

 grouting of soft rock areas and/or other additional safety measure even if their
necessity arises only during construction,
 expenses incurred for dewatering even if the quantities of water originally
expected are exceeded substantially,
 loss or damage due to breakdown of the dewatering system if such breakdown
could have been avoided by sufficient stand-by facilities,
 expenses incurred for additional sealing or water proofing and additional facilities for the
discharge of run off and or underground water,
 expenses incurred for the repairs of eroded slopes or other graded areas, if the
Insured has failed to take the measures required or to take them in time,
 loss or damage due to subsidence if caused by insufficient compacting, cracks
and leakage not caused by Insured peril.

11. SPECIAL CONDITIONS CONCERNING SAFETY MEASURES WITH RESPECT TO

PRECIPITATION, FLOOD AND INUNDATION -

It is agreed and understood that otherwise subject to the terms, exclusions, provisions and
conditions contained in the policy or endorsed thereon, the Insurers shall indemnify the
Insured for loss, damage or liability caused directly or indirectly by precipitation only if
adequate precautions have been taken in designing and executing the project involved.
In this context, adequate precautions shall mean that allowance is made for precipitation,
flood and inundation up to a return period of 10 years for the location insured and the entire
policy period on the basis of statistics prepared by the Meteorological agencies.
Loss, damage or liability resulting from the Insured’s not immediately removing obstruction
(e.g. sand, trees) from watercourses, whether carrying water or not, in order to maintain free
water flow shall not be idemnifiable.

12. SPECIAL CONDITIONS CONCERNING REMOVAL OF DEBRIS FROM LANDSLIDES -

13. ENDORSEMENT FOR ESCALATION PROVISION –

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 For Endorsement Wording – Refer Endt. No. ……………
‘In consideration of the payment of an additional premium of Rs. _______. It is hereby
declared and agreed that the Company shall provide for escalation in Sum Insured under
items of Section I of the schedule attached to the policy upto__________% of the Original
Site value, the basis of claim settlement shall be the original Site value of effected
equipment plus increase in cost of replacement, if any, provided that the increase in the
value of such equipment does not exceed _______% of the original site value.
It is also hereby declared and agreed that in the event of a claim the insured would be
considered as fully insured upto the Sum Insured inclusive of _________% increase as per
selected escalation and under-insurance would apply only in the event of the cost of
replacement of the effected equipment exceeding the original value of selected
___________% towards escalation.
It is however understood and agreed that the premium collected against price escalation
herein above shall not be subject to refund the premium adjustment clause in the memo 2 of
the policy.

It is further understood and agreed that in case of additional premium chargeable during
final adjustment, additional escalation premium will be charged to the insured but in case of
any premium refundable during final adjustment no refund shall be allowed against the
escalation premium already charged to the insured’.

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