Compulsory insurance for decennial liability of construction professionals

15 June 2017

On 11 May 2017, the House of Representatives voted a new draft act requiring contractors and other service providers in the construction sector to take out insurance covering their decennial liability under articles 1792 and 2270 of the Civil Code. These articles impose a decennial liability on architects and contractors for construction defects threatening the solidity or stability of a building or of one of its main components.

According to the preparatory documents, this new legislation has two mains goals. The first objective is to put an end to the discrimination between architects on the one hand and other construction professionals on the other. In a decision dated 12 July 2007, the Constitutional Court had found that the absence of an obligation for the latter to insure their liability constituted discrimination against architects. The second objective is to improve consumer protection, in particular in the event of bankruptcy of the contractor after approval of the works.

The obligation to insure applies to (sub-)contractors and architects as well as other providers of intangible services relating to the building (such as specialised consulting offices), with the exception of real estate developers. This obligation replaces, as far as architects are concerned, the current (broader) obligation under article 9 of the act of 20 February 1939 on the protection of the title and profession of architects. However, their deontological obligations, including the obligation to insure against professional liability claims, remain unaffected.

The scope of the aforementioned obligation is nevertheless limited to the decennial liability of construction professionals for works relating to buildings that are intended, as from the start of the works, for residential use (houses, apartments). Only works requiring the intervention of an architect are concerned. Furthermore, the insurance cover can be limited to damage affecting the solidity, stability and watertightness of the structure of the building. Finally, specific types of damage are excluded, including aesthetic damage or purely intangible damage, as well as damage below EUR 2,500. Liabilities stemming from other types of works or which are excluded from the scope of application of the legislation do not have to be covered. These exclusions, as well as the limitation of the scope of the obligation to residential works, give rise to many criticisms and uncertainties. The scope of application of the decennial liability is, indeed, much broader and is not limited to residential buildings.

The new legislation imposes a minimum coverage of EUR 500,000 per claim for buildings whose rebuilding value exceeds EUR 500,000. Below this threshold, the coverage must at least be equal to the rebuilding value of the building.

The act provides for the possibility of taking out global or project-specific insurance cover. A unique project-specific insurance policy can also be taken out for the benefit of all of the stakeholders involved that are required to insure their decennial liability.

Contractors and other professionals subject to this obligation must submit an insurance certificate to the principal and to the architect prior to commencement of the works. For architects, compliance is supervised through their professional order.

The obligation to insure will enter into force for all building projects falling within its material scope of application and for which a final building permit is issued after 1 July 2018.