MDS creates a 10-year insurance solution for construction companies

MDS, a leading global insurance broking and risk consulting business, set up in Portugal, has launched 10-year liability insurance for firms in its country keen to operate in France. Such insurance is required by law in France for all companies and/or parties involved in construction, regardless of their activity and country of origin. 

The 10-year liability insurance covers the construction firm for claims against it from the developer and successive acquirers, for structural faults/damage that make it unsuitable for its purpose or claims that result from hidden flaws arising in a ten-year period from the project completion. Additionally, the insurance provides a technical and legal counselling service working within the scope of the construction business, meeting companies’ specific needs. 

The 10-year insurance is available to all construction companies, architects, contractors, engineers, technicians and any other third-party connected to the developer by a works contract. Subcontractors are not required to have 10-year liability cover since they have no direct contract with the developer. They are still however, accountable to the main contractor and developer, and as a consequence, should have the protection of insurance. 

The guarantee starts  on the project’s completion certificate date and lasts for 10 years after that date without interruption; the policy, however, must be taken out before the project work begins. 

The insurance is mandatory for construction work associated with houses and trade, service and industrial buildings, whether new builds or refurbishments. 

Jacqueline Legrand, chief operating officer of MDS Group, comments: "MDS is aware of the difficulties the requirement for 10-year Insurance in France poses to foreign companies, and that is why it developed a solution with unique benefits to support Portuguese companies operating in the French market. With this solution, we can help the construction sector develop its business abroad while mitigating the risks they are exposed to.”

The 10-year liability establishes the principle of assumed responsibility for a 10-year period after the project completion. This insurance, compulsory in France, is reinforced by the current construction insurance system (Spinetta law), which guarantees the owners of real-estate property effective protection against serious damage that might arise during this 10-year period.

This law aims, on the one hand, to protect consumers and on the other, to educate the sector on the need for a high-quality insurance solution. 

As a result, developers are obliged  to purchase  damages insurance and  constructors - or any other parties undertaking  construction work – are required to take out liability insurance.