Since 1 July 2018, the Peeters-Borsus Act* has been in effect. This law stipulates that all architects, contractors and other service providers in the construction industry are required to purchase Ten-year Liability Insurance.

On 1 July 2019, the Peeters-Ducarme Act came into effect. It supplements the Peeters-Borsus Act and introduces compulsory insurance for intellectual professions in the construction sector. All information can be found here.

What exactly does the law entail?

The Peeters-Borsus Act requires all parties involved in the structural work to insure their civil liability for a period of 10 years after acceptance of the work. This decennial insurance is limited to damages that relate to the solidity, stability and watertightness of the home when they compromise its solidity and stability. The law has applied since 1 July 2018 to real estate works whose final planning permission was issued after the law came into force.

Why this law?

Before the Peeters-Borsus Act came into force, only architects were obliged to insure their ten-year liability. Contractors, developers and other service providers in the construction industry did not have an insurance requirement, even though they have a similar liability. That distinction was challenged in the Constitutional Court in 2007. With the Peeters-Borsus Act, the legislator has put an end to this discrimination.

At the same time, the law provides better protection for the commissioning authority. Whereas the liable contractor could no longer claim compensation when he was bankrupt, for example, because of the Peeters-Borsus Act he is guaranteed the right to compensation for ten years.

Who is covered by the new law?

  • Architects
  • Contractors and service providers listed as contractors in the explanatory memorandum to the bill, who perform works that fall within the concept of ‘shell’: the contractor who lays the foundations, the roofer, the fitter of the windows and doors, the person who does the screed work, the plumber, etc., …
  • Other service providers in the construction sector (such as engineering firms)

Limited scope

In order to control cost increases in the construction industry, the insurance requirement was limited. The main provisions and restrictions:

  • The law only applies to housing located in Belgium and whichis mainly intended for individual accommodation. The following constructions, for example, are not included for various reasons: rooms for students and seasonal workers, convents, hospitals, institutions, collective housing, …
  • Only the ten-year liability must be insured.
  • Different forms of damage are excluded: aesthetic damage, purely immaterial damage, material damage for less than 2,500 euros, …
  • The guarantee has a (theoretical) upper limit of 500,000 euros, even if the value of the reconstruction exceeds 500,000 euros.
  • For contractors, the insurance is only mandatory for construction sites where the intervention of an architect is required by law.

What about the burden of proof?

All professionals in the construction sector must be able to prove that their ten-year liability is insured.

  • For architects this is done via the Order of Architects. This body receives a list of insured architects from insurers every year. In addition, the architect is assigned an important control task: he will have to check whether all the parties on the site have a certificate evidencing their Ten-year Liability Insurance.
  • Contractors and other service providers thus have active burden of proof: they must provide an insurance certificate to the architect and the client before starting any real estate activities. The contractor must also submit this certificate to the National Social Security Office (RSZ).

If the construction of the house is financed with a loan, the client must provide the lending institution with a certificate evidencing that the architect, contractors and other service providers are insured.

If the property is sold before the end of the period in which the ten-year liability applies, the notary must ensure that the insurance certificate is delivered to the buyer.

Up to a 10,000 euros fine

Architects, contractors and other service providers who do not respect the law can be fined between 26 and 10,000 euros.

 

* This law was published on Friday 9 June 2017 in the Belgian Official Gazette as the ‘law of 31 May 2017 on the compulsory insurance of the ten-year civil liability for contractors, architects and other service providers in the construction sector of real estate works and this amending the law of 20 February 1939 on the protection of the title and profession of architect’.

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