The performance of any rebar coating system depends upon its resistance to corrosion in the presence of chloride contaminated concrete. It also mainly depends upon its tolerance towards damage that may occur during handling, transporting and concreting. The severe corrosion of epoxy coated reinforcing steel in long key bridge and other structures in Florida gave raise to the concern over the influence of damages in the coating system [R.J. Kessler, P.G. Powers, Interim report on corrosion evaluation of substructure in Long key bridge, Corrosion Report No. 87-9A, Florida Department of Transportation, Florida, 1987]. The performance of rebar coating such as galvanizing and epoxy based coating with prior surface damage has been evaluated and reported. [J. Hartley, Concrete Jan/Feb (1994) 12–15; A. Sagues, Performance of galvanized rebars in marine substructure service, Project ZE-418, Part I, October, 1994]. To date, the performance of cement based coatings with prior damages has not been widely studied and reported. In the present investigation the effect of prior damage produced during concrete pouring has been studied on inhibited cement slurry coating. To simulate the marine substructure environment, macrocell corrosion has been created via a chloride ion concentration gradient. Test conditions and method of macrocell current measurement as described in ASTM G 109-92 have been followed. The above investigation revealed that the cement based coating appears to have better tolerance towards defects in chloride contaminated concrete as compared to epoxy based coating system. The performance of the coating is independent of the height of concrete pouring.