After a loss, the contractor does not only ask how much the insurer will pay for the collapsed floor slab. The real question is whether the deadline can still be met: whether work has to continue over two weekends, whether a night shift has to be organised, whether the replacement steel structure has to be brought in by express freight, the debris removed, and a structural engineer and an expert paid. Together, these costs are often comparable to the physical damage itself – and CAR (contractors' all risks) insurance does not cover them as a matter of course. As a broker, I see that contractors find out during claims settlement that overtime and express freight are a question of endorsements, that debris removal has its own limit, and that the fee of their own expert is not automatically borne by the insurer. This article goes through, item by item, how each additional cost can be brought into cover – zooming in on this one point of the map in the what CAR/EAR covers article.
- The property section of CAR (contractors' all risks) insurance pays for restoring the damaged part under normal working arrangements; the extra cost of speeding up to meet the deadline – overtime, night and public-holiday work, express freight – is covered only by a separate endorsement (in the Munich Re model, 006, and 007 for airfreight) and subject to a sub-limit.
- In Hungarian policy conditions, debris removal, expert and designer fees and the costs of loss mitigation are typically sub-limited items – in one publicly available set of conditions, for example, 5% of the contract works value, up to HUF 10 million – which may be too little for a large structure.
- Any additional cost is paid only if the underlying loss is itself payable; repairing the defective part, liquidated damages (kötbér) and the cost of speeding up where there has been no loss remain outside the cover – the endorsements have to be requested when the policy is taken out; they cannot be added during claims settlement.
Why is it not automatically part of the loss?
The property section of CAR pays the cost of restoring the property damaged by the insured event: rebuilding, after demolition, what the loss destroyed, to its condition before the loss event. The policy conditions understand this as “normal” working arrangements, the usual mode of transport and the usual prices. Whatever arises on top of this – because the work has to be done faster – is not the extent of the loss but the price of the deadline. Policy conditions based on the Munich Re models therefore deal with the costs of acceleration in separate endorsements: endorsement 006 covers the extra cost of overtime, night and public-holiday work and express freight, and endorsement 007 the extra cost of airfreight, each for an additional premium and with its own limit. Debris removal and expert fees, in turn, are named items in most Hungarian policy conditions, but restricted by a sub-limit. The insurer pays only for what is an insured event under your contract – and for additional costs this sentence holds separately for each endorsement.
Overtime, night and public-holiday work, express freight
One publicly available Hungarian set of conditions (Groupama GB517) offers endorsement 006 for an additional premium and provides cover for the additional cost up to 25% of the indemnity due under the contract. The structure follows the Munich Re model, three conditions of which typically reappear in the Hungarian versions. First: the additional cost must arise in connection with a loss payable under the policy – the endorsement does not apply to speeding up where there has been no loss, or to catching up on a schedule that has slipped. Second: if the damaged item is underinsured, the payment under the endorsement is reduced in the same proportion. Third: the endorsement has its own limit (in GB517, 25% of the benefit payable without the endorsement, per loss event), and depending on the insurer it may also have a separate deductible – these appear on a separate line in the quote, or they do not, in which case there is no cover at all. Airfreight is a separate endorsement in the model because it is an order of magnitude more expensive; not every Hungarian set of conditions offers it (the list of endorsements in GB517 marks endorsement 007 as discontinued), and where it is available, it typically comes with a higher deductible and a separate sub-limit, differing from insurer to insurer.
What does this mean in practice? If the contractor has a deadline backed by liquidated damages (kötbér), endorsement 006 is the only tool through which the insurer shares in the cost of meeting the deadline – because, according to the exclusions map, no endorsement covers the liquidated damages themselves. So the endorsement is not a luxury but the only insurable side of the liquidated-damages risk.
Debris removal: the item most often undersized
Debris removal – demolition, loading, transport, landfill fees – is typically part of the basic cover in Hungarian policy conditions, but with its own limit. In the conditions cited, this is 5% of the sum insured for the contract works, up to HUF 10 million. That is enough for a family house, but quickly becomes too little for a collapsed hall roof or for fire debris that has to be handled as hazardous waste. The solution is simple: a separate amount matched to the size of the project can be requested for debris removal in the quote, and this is a separate line when quotes are compared. In a claim, it is worth collecting the debris removal invoices separately from the restoration costs, because the insurer settles them against a separate limit.
Expert and designer fees, and the costs of loss mitigation
The loss adjuster sent by the insurer is the insurer's cost. The contractor's own expert – structural engineer, geotechnical engineer, court-registered forensic expert – and the fee for the redesign needed for the restoration are paid only if the policy conditions name them; in the conditions cited, expert costs connected with assessing the loss fall under the same sub-limit as debris removal. An important boundary: correcting defective design or redesigning a part that was defective from the outset does not belong here; that is the world of exclusions covered in the design defects article.
The cost of loss mitigation is a separate category. Under the Hungarian Civil Code (Ptk.) rules on indemnity insurance, the insured must act as can generally be expected in the given situation in order to mitigate the loss, and the necessary costs of mitigation are borne by the insurer, within the limits of the sum insured, even if the mitigation was unsuccessful; in a business contract the policy conditions may deviate from this, so it is worth checking in the CAR conditions what limit applies. The GB517 conditions put this in a sub-limit shared with debris removal. Examples include temporary covering after a storm, drying out a structure that has let in water, or securing scaffolding that has shifted – these costs should be incurred where justified, documented and, where possible, agreed with the insurer's claims line.
What stays outside
Three items are not payable under most policy conditions, not even with an endorsement: replacing or repairing your own defective work or defective material – consequential damage to the parts built without defects is payable, the defective part itself is not –; liquidated damages, fines and the financial consequences of delay; and any cost of acceleration that is not connected to a payable loss. If the insurer rejects the underlying loss, the additional costs attached to it fall away as well – which is why a dispute over additional costs is also a dispute over the underlying loss.
How to claim them – and how to take out the cover
In claims settlement, an additional cost is reimbursed if it is visible and justified. Keep overtime, night and public-holiday supplements, freight invoices and debris removal on a separate cost centre; record in the site diary why acceleration was necessary (deadline, liquidated damages, weather window), and agree larger items – express freight or airfreight – with the insurer's loss adjuster in advance where possible. The primary route for reporting the claim is the insurer's claims line; the process is described in the article on the first steps of reporting a claim. And when taking out the policy, look for three lines in the quote: whether endorsement 006 (and, if needed, 007) is included and its limit, the separate amount for debris removal, and the sub-limit for expert fees and loss mitigation – these are rows of the quote comparison table. Two quotes can have the same premium while these lines are empty in one of them. If you let me know before a new project or before the renewal date of your annual open cover, I prepare the comparison of the endorsements and the paperwork.
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Sources
- Groupama GB517 construction and erection insurance conditions – endorsement 006 (overtime, night and public-holiday work, express freight), point X.9 (sub-limit for debris removal, expert fees and loss mitigation)
- Alfa Construction and Erection Insurance (CAR) II conditions (CARII-SZ-230801, in force from 1 August 2023) – property exclusions (consequential loss, defective material and workmanship)
- Hungarian Civil Code (Ptk., Act V of 2013) – rules on indemnity insurance contracts, the duty to prevent and mitigate loss
- Public Procurement Authority (Közbeszerzési Hatóság): Construction insurance – guidance (2026-02-12)
- Generali – Claims settlement information (quoting the Ptk. rule on loss mitigation: necessary costs are borne by the insurer even if mitigation fails)
- Genertel – Claims settlement information (quoting the Ptk. rule on loss mitigation: necessary costs are borne by the insurer even if mitigation fails)
