Although a car policy may be taken by the principal or the contractor but usually, under the terms of the agreement between the contractor and the principal, it is obligatory on part of the contractor to effect a car insurance in their joint names before the commencement of the project. The sum insured under the policy must not be less than the full value of the contract works at the completion of contract inclusive of all materials, wages, freight, custom duties, construction cost and material or items supplied by the principal