In Belgium, there are two key laws governing the mandatory insurance of construction parties.
Peeters-Borsus: ten-year liability
The first is the Peeters-Borsus Act of 31 May 2017. This obliges architects, contractors and other intellectual professions in the construction sector to insure their ten-year liability for defects that affect the stability, solidity or watertightness of the building’s basic structure. This obligation applies exclusively to immovable works on buildings intended for habitation.
Points you should take into account:
- Insured limit: The statutory minimum insurance cover is 500,000 euros per claim. This cover must comply with the Belgian legal framework, meaning that the insured amount must be legally index-linked. There is often insufficient provision – if any – for these indexed amounts in foreign insurance policies, so that they do not always meet Belgian requirements.
- Start date: Liability commences once the works have been accepted, so it is important to define this moment clearly in the contract.
- Insurance certificate: Furthermore, the construction party must be able to present an insurance certificate on request. Failure to do so may lead to a fine or even the suspension of the work.
These points all relate to a legally mandatory, typically Belgian insurance policy that applies exclusively to residential construction, with specific and legally index-linked insured amounts. A project cannot start without such a policy, liability commences on acceptance of the work (a moment that is preferably contractually defined) and non-compliance may lead to fines or the suspension of the work.
Peeters-Ducarme: professional civil liability
In addition, there is the Peeters-Ducarme Act of 9 May 2019. This introduces a general insurance obligation for the professional civil liability of all service providers in the construction sector. It provides for minimum cover per claim; however, a higher insured sum is often advisable in view of a project’s scope and risk.
In addition to these statutory obligations, architects are ethically bound to insure their full professional liability, including the ten-year liability for all construction work. This is the case even when this lies outside the scope of the statutory obligation regarding residential construction. This obligation applies only to architects and not to other design parties.
In practice, a professional liability policy includes various forms of cover, including professional liability for design and supervision errors, the ten-year liability and operational civil liability, as well as loss prevention and legal defence costs. Furthermore, if there is joint and several liability, meaning that the architect and contractor can each be held individually liable for the full amount of the damage if their combined errors have led to the same damage, the policy covers the consequences of this. In the case of the ten-year liability, this joint and several liability cannot be contractually excluded.
All of this is particularly relevant for foreign architects working in Belgium. In practice, foreign insurance policies almost never meet Belgian legal requirements, which means that additional Belgian cover is necessary. For example, a project policy could be arranged, or a Belgian firm could be included in an existing policy as a co-insured party or subcontractor.
A foreign design professional carrying out a commission in Belgium must ensure compliance with the Belgian insurance framework, regardless of nationality or place of business, by:
- Taking out ten-year liability cover in line with the Peeters-Borsus law on residential construction projects.
- Taking out civil professional liability cover in line with the Peeters-Ducarme law.
- Insuring against ten-year liability in line with Articles 2270 and 1792 of the Civil Code. Although the insurance obligation applies only to architects, the law also applies to civil engineers, so insurance is highly recommended.
- Holding an insurance certificate that can be presented on request prior to the start of work on residential construction projects.
- Taking account of the fact that certain liabilities, such as ten-year liability, are statutory requirements and cannot be contractually excluded or limited.
Services provided by Vanbreda Risk & Benefits
We advise you to always analyse your contracts thoroughly and will be happy to provide expert guidance and support to you as a construction party. Want to know more? Get in touch at bouw@vanbreda.be.
