Case study: Policy Limits and Loss Ratio Managed through a 50% CAR Claim Reduction
17 Jul 2026
Whether it’s a small renovation or a multi‑million‑dollar development, every project faces a wide range of risks throughout its lifecycle, from inception and construction to completion and maintenance.
This is where Construction All Risks / Erection All Risks (CAR/EAR) insurance makes a critical difference. Beyond coverage for damage to project works and third party liabilities, MSIG adopts a hands on claims management approach to safeguard project outcomes.
In this case, MSIG’s active claims oversight and independent technical review enabled a reduction of over 50% on the CAR claim, while ensuring appropriate repairs.
Client Background
Our Insured is a main contractor appointed for a S$283 million mixed-development project, comprising a retail mall, office units, serviced apartments and residential apartments. Given the scale and complexity of the project, it was insured under a CAR policy involving multiple co-insurers, with MSIG acting as the lead insurer.
During the construction phase, a water incident occurred where water was discharged from a wet riser landing valve, resulting in the inundation of three lifts. The damage affected the electronic and electrical components including those located within the lift shaft.
MSIG’s Response
MSIG took the following actions to assist our Insured in this incident:
- Prompt deployment of a loss adjuster to carry out a preliminary site inspection.
- The lift contractor subsequently submitted a repair quotation of about S$246,000 following the preliminary site visit.
- MSIG engaged an independent expert to assist the loss adjuster in the damage assessment exercise.
- Multiple joint inspections revealed that several proposed replacement parts and costs were overstated.
Results and Outcome
Based on discussions and supporting evidence, the lift contractor revised its repair costs, leading to a reduction of over 50% from the initial quotation. The final claim amount was settled by MSIG together with the co insurers.
Why this Matters
As insurer, we share a common goal with our clients: to ensure project continuity while managing rectification costs responsibly. Inflated or unnecessary repair costs, if left unaddressed, can result in:
- Erosion of the insured’s remaining policy limits
- Poorer claims experience
- Higher loss ratios
- Increased premiums in the future
A well structured CAR/EAR policy can therefore support more than loss recovery, enabling our insureds to manage costs prudently while protecting long term risk outcomes.
* Any figures shown are rounded to the nearest dollar.
