Liability insurance in the construction industry
The construction, restoration and rehabilitation of structures are perilous fields where the risk of error is omnipresent and where a lot of damage can occur. This damage, the financial consequences of which are often immeasurable, can even occur several years after completion of the work.
This is why the law, in its protective approach, requires anyone involved in the construction industry to take out an insurance policy covering the pecuniary consequences that their civil liability could give rise to, for damages that may affect third parties.
Part one: compulsory professional liability insurance.
Legislative and / or regulatory references related to the insurance obligation.
Who are the people subject to compulsory insurance?
What does the insurance obligation relate to?
What are the limits of the guarantees offered?
Part two: compulsory insurance for ten-year civil liability.
Legislative and / or regulatory references related to the insurance obligation?
Who are the people subject to compulsory insurance?
What does the insurance obligation relate to?
What are the penalties for lack of insurance?
Ways and means provided for by law to verify compliance with these obligations.
Some examples of the legislative and regulatory provisions of the construction sector which deal with these compulsory insurances.
Part one: compulsory professional liability insurance.
1. Legislative and / or regulatory references related to the insurance obligation.
-Art. 175 / paragraph 1, of Ordinance 95-07 relating to insurance, amended and supplemented:
Any architect, contractor, technical inspector and other stakeholder, natural or legal person whose professional civil liability can be engaged in connection with construction, restoration or rehabilitation works, is required to be covered by insurance.
-Art. 2 of Executive Decree No. 95-414 relating to the obligation of professional civil liability insurance for those involved in construction.
All those involved in construction, natural or legal persons are required to take out insurance covering their professional civil liability that may be incurred as a result of:
architectural studies and designs;
engineering studies and designs;
the execution of works in the building trades relating to the solidity, stability or those that could compromise the safety of the work;
continuous monitoring of the quality of materials and execution of the work;
technical inspections of the design of the work;
monitoring of construction, restoration and rehabilitation works.
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2. Who are the people subject to compulsory insurance?
Are subject to this obligation all:
Architect ;
Entrepreneur;
Technical controller;
Other stakeholder, natural or legal person whose professional civil liability can be engaged in connection with construction, restoration or rehabilitation works.
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3. What does the insurance obligation relate to?
The purpose of this insurance is to guarantee the financial consequences of professional civil liability that those involved in this field may incur in connection with construction, restoration or rehabilitation work.
Professional liability insurance takes effect from the date of opening of the site until the date of final acceptance of the work [1].
This insurance can be extended to subcontractors when they are not covered by another insurance [2].
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4. What are the limits of the guarantees offered?
The sanction provided for by law, in the event of non-compliance with this obligation (professional liability), is a fine ranging from 5,000 DA to 100,000 DA, without prejudice to any other sanction to which these persons may be subject in accordance with the current legislation [3].
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Part two: compulsory insurance for ten-year civil liability.
1. Legislative and / or regulatory references related to the insurance obligation?
-Art. 554. of the civil code
The architect and the contractor are jointly responsible, for ten (10) years, for the total or partial destruction of real estate construction work or other permanent works, even though the destruction would come from defects in the ground.
The guarantee provided for by the preceding paragraph extends to defects which exist in constructions and structures and which threaten the solidity and safety of the structure.
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