Frederik Goossens - Client Advisor
The Peeters-Borsus act (‘Peeters I’, in effect since the 1st of July 2018) regulates the scope of the compulsory ten-year liability insurance concerning stability, solidity and water tightness in private housing (more than 50% of the surface needs to be intended for private housing) projects where the intervention of an architect is required and for which the final building permit was granted from the 1st of July 2018.
The predecessor (the Laruelle decree) was deemed discriminatory by The Belgian Constitutional Court since it was merely applicable to architects.
Peeters I widens the obligation to insure the ten-year liability to stability engineers and contractors who carry out works related to the stability, solidity and water tightness of the building.
The promoter-contractor is a contractor within the meaning of the Peeters Act who must insure their ten-year liability.
A promoter-seller, on the other hand, is not a contractor within the meaning of the Peeters Act who must insure their ten-year liability, even though they might carry a ten-year liability.
Article 2, 1° of Peeters I defines the term ‘contractor’, which is crucial In order to determine the classification of a self-builder under Peeters 1.
In accordance with Article 2, 1 ° of the law, a contractor is “any natural or legal person who undertakes, on behalf of another person and for direct or indirect compensation, in complete independence but without authority to represent, a particular real estate work on houses situated in Belgium for which the intervention of an architect is compulsory under Article 4 of the Law of 20 February 1939 on the protection of the title and the profession of the architect ”.
A person who carries out work for himself is thus not considered a contractor who must insure their ten-year liability within the meaning of the Peeters Act.
The obligation can however still be applicable to a contractor who carries out certain works on behalf of the self-builder.
The Peeters-Ducarme (Peeters II) act was implemented on July 1st, 2019, and it regards the obligation to insure professional liability for service providers in the construction sector.
With the Ducrame act (Peeters II), all professionals delivering purely intellectual performances in the construction sector have to take out this professional liability insurance.
This coverage is now required for all building projects (so not only private housing, but also the construction of roads, bridges, industry...) and targets both the contractual as the extra-contractual liability the professionals might encounter.
The intellectual professions in the construction sector include amongst other architects, engineers, surveyors, safety and health coordinators, environmental experts, energy experts...
What does this legislation mean for the construction sector?
The Peeters-Borsus Act does not target damages happening while the construction phase is still ongoing (this kind of damage usually resides under a CAR-coverage), or for minor defects. However, statistics show that such costs are the most frequent.
Neither does the act target aesthetic damage, purely immaterial damage or material damage less than € 2500 (deductible).
The insured amount must be at least € 642.746,92 (ABEX 847) but can be limited to the reconstruction value if this amount is lower.
For coverage, you can opt for different types. There is the possibility of a project or a subscription base policy. Besides this, you can choose between a group or individual coverage.
The project policy only applies to a certain building project that meets the requirements as set out by Peeters I, whereas a subscription-based policy covers multiple constructions of an insured party within its limits. For large building companies, such policies facilitate the administrative requirement cf. Peeters I.
Individual coverage is solely applicable to the policyholder and thus the 10-year liability that they might encounter. This m.o. requires each party (which meets the requirements of Peeters I) to underwrite their own policy. This is contrary to the subscription-based policy which covers all parties involved in the project, but again: only when the obligation to insure the 10-year liability is applicable.
In addition to the insurance obligation, a new administrative obligation is also imposed. The architect had been appointed as the responsible party to check whether an Insurance Certificate is present at the site prior to the works. No certificate means the works have to hold until it is delivered. It’s important to stress out that the obligation of the architect limits to check whether the Insurance Certificate is available prior to the works, but not to the truthfulness of it.
The notary (in case of a later sale) will also check whether the certificates are available.
In the absence of valid insurance, a fine from €26 to €10.000 will be enforced.
Lastly, all contracts and invoices in the context of a construction project must state the name and company number of the insurance company as well as the liability insurance policy number. The goal is to inform the client about the contact details of the insurance company so that in the event of any damages, they can contact the company directly.
Peeters II is not characterized by such requirements but demands the following insurance modalities to be met.
The minimum coverage, per claim, must not be less than:
- € 1.500.000 for damage resulting from physical injuries
- € 500.000 for the total of material and immaterial consequential damage
- € 10.000 for the objects in care, custody and control
This with an annual limit of 5,000,000 euros for all claims combined.
We know that the construction sector frequently changes. We continuously monitor all legal changes, and we have our own conditions for each product we use. At Concordia, we know exactly what you need, and we don’t hesitate. You can count on our hands-on mentality and pragmatic approach, which enables us to offer you the most suitable solution for your needs. Contact our specialized team of experts today, rely on your guidance and get the best insurance the market has to offer.