If you take the test in the car of your driving instructor, then it will be covered under that special insurance they're talking about but you'll have to pay an additional Rs1500 for it. It's a kind of learner insurance which covers drivers who are of higher risk of being involved in an accident sort of thing. If you were to sit the practical test in your own car (your dad's car for example), then you'd need to contact insurance companies like Sicom, Mauritius Union etc to arrange for that policy.
You'll need to bring your National Identity Card, Driving Licence Counterpart (DLC) and fee of Rs500 to book the practical test. The Special Insurance Policy is requested on the day of the test itself if you're bringing a private car.
I just called their hotline (166) and they said you can come down anytime to book the test.