The sum insured of contractor all risks insurance should refers to the contract price stated in the contract document signed by project owner and main contractor. If in the middle of construction period, there is any additional contract price, i.e due to inflation, the insured (contractor) must notify insurance company as soon as possible. From the latest information, insurer will recalculate premium should be charged in the end of the insurance period. As note, this provision only be applied if the amount of project contract based on non fix price contract.

For fix price or lumpsum contract while the value of contract will never be changed throughout the period of construction, the sum insured will not be able to be revised, so the indemnity cost may exceed the contract price itself. To ensure that the insurer will not take inequitable premium, they will apply the higher premium and deductible for this type of contract.

For machinery and project plant, the sum insured usually remain unchanged and the sum insured will be determined by new replacement value (NRV) basis. It mean that the damaged items will be replaced as a new. Thus, the replacement cost will include freight cost, dues, custom duties and installation cost.

For third party liability cover, the sum insured will be determined as the separate value from the sum insured of project contract. The insured can consider the potential loss may be suffered by third parties, not including the insured, relatives or employees. This cover usually will be made in separate limitation. First, bodily injury (BI) and second, property damage (PD). But, this limitation also can be written by combined single limit (CSL). In respect of third party compensation, the insurer will in addition indemnify the insured against all costs and expenses of litigation recovered by any claimant from the insured, and all costs and expenses incurred with the written consent of the insurer, provided that such liability shall not exceed the limits of indemnity stated in the policy schedule.