The Belgian Civil Code stipulates in its articles 1792/2270 that the contractor and the architect are liable for 10 years as from the date of reception of the construction works if serious defects or waterproof issues jeopardize the stability or solidity of the building or an important part of it.
It is quite common that for construction works the Principal or the Contractor purchases Decennial Liability insurance covering all parties involved in the construction works. It is even standard practice for construction or infrastructure works that are subject of a public tender procedure.
There is a legal obligation for architects, contractors and other service providers to insure their decennial liability for private house construction projects. Professional Liability insurance is also required for all parties that do provide an intellectual service and is applicable to all sorts of construction projects. This obligation is not only relevant for architects, but also for engineers, study bureaux, surveyors, safety & health coordinators, environmentalists, landscape architects, urban planners, energy experts auditors, project managers and interior architects.
Many intellectual professionals purchase an annual open cover insuring all their professional activities and services.
We can help with either option.
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Howden can analyse all contractual documents, map the liabilities and risks of all parties involved, and propose the relevant insurances (whether you are a contractor, architect, engineer, promotor, principal, project developer, etc.).
What does Decennial Liability insurance cover?
Typical examples of Decennial Liability are the collapse, or threat of collapse, of a building or a bridge, or part thereof.
Any Decennial Liability Insurance covers for a fixed period of 10 years starting from the provisional or the final reception of the construction works. During this time, it covers any repair or reconstruction costs of the insured works (that were controlled before its reception) to the extent the damages do jeopardize the stability or solidity of the construction as defined by law and interpreted by the courts.
A Decennial Liability Insurance is always subject to a survey during the construction works carried out by the insurer or by an external surveyor approved by the insurer. The type of control depends on the size of the value to be insured. The findings and recommendations of the insurer or the surveyor will determine the insurability of the construction works.
The beneficiary of the insurance is the current and/or future owner of the building or construction.
A good policy will also cover:
The insurance can also provide coverage for the following costs, damages, losses or claims as long as these are resulting from damage or loss covered under the standard decennial liability insuring clause:
- the repair costs to non-structural parts of the insured works (e.g. furnishing works, technical installations, etc.); and
- liability claims made against the architect, contractor or engineer, e.g. the collapse of a building results in physical damage to surrounding buildings. This coverage is typically provided on an Excess-basis, i.e. supplemental to the existing Liability Insurances of the architect, contractor or engineer, and
- consequential financial losses incurred by the neighbours; and
- consequential financial losses (business interruption) incurred by the principal/owner of the insured works.
The following are excluded:
- Natural catastrophes;
- Normal wear and tear;
- Nuclear risks;
- purely aesthetic damage; and
- Intentional acts.
Decennial Liability Insurance when and where is it compulsory?
In Belgium, the Law “Laruelle” obliged architects since 2007 to insure their professional liability, including decennial liability.
The Law “Peeters-Borsus” – 1 July 2018
The law “Peeters-Borsus” replaced the law “Laruelle” as from 1 July 2018 at least in respect of the decennial liability for private housing projects for which the intervention of an architect is mandatory.
The obligation to insure Decennial liability was extended to the contractor and other service providers involved in private housing projects. The law allows that various parties are all insured in 1 global Decennial Liability Insurance policy.
However, the law was silent in respect to professional liability that did not qualify as Decennial Liability.
The Law “Peeters-Ducarme” – 1 July 2019
An additional law called “Peeters-Ducarme” filled the gap partly since architects are since 1 July 2019 also obliged to insure their professional liability that does not qualify as Decennial Liability. However, the legislator did not extend the obligation to insure decennial liability to other projects than private housing projects.
An important difference between the two laws is that the first law, “Peeters-Borsus”, only relates to private housing projects involving an architect. The second law, “Peeters-Ducarme”, applies to all construction projects, even if no architect is called upon (in other words is this law also applicable on other projects than private housing projects).
Overview of the compulsory insurances in the construction world