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July 1, 2019 "Peeters-Ducarme Act"

Since 1 July 2019, intellectual professions in the construction sector are obliged to insure their civil professional liability. A consequence of the Peeters-Ducarme Act, which was introduced as an addition to the Peeters-Borsus Act to better protect building owners in the event of conflicts. Which insurances are now mandatory if you are active in the construction sector and what should you definitely pay attention to?

On 1 July 2019, the Peeters-Ducarme Act entered into force. It supplements the Peeters-Borsus Act, which came into force exactly one year earlier, and brings more equality in the insurance obligation of the various construction actors.

What was the situation like after the introduction of the Peeters-Borsus Act on 1 July 2018?

Contractors, architects and other service providers in the construction sector are liable for stability-threatening defects and watertightness problems for up to ten years after the completion of a structure if these can be linked to stability or solidity. Since 1 July 2018, the Peeters-Borsus Act obliges them to insure this ten-year liability. However, this legislation contains many restrictions: 

  • The insurance obligation is only imposed on contractors, subcontractors, architects and other service providers (including their appointees and employees) who carry out real estate construction works or who provide intellectual services with regard to those immovable works.

  • The law only applies to homes located in Belgium that are mainly (more than 50%) intended for habitation by a family or single person. Collective residential buildings where at least one residence or sanitary block is shared or used by people without a family connection, fall outside the scope.

  • The obligation to insure only applies to housing projects for which the final building permit was issued from 1 July 2018 and for which the intervention of an architect is legally required.

  • The liability insurance is limited to damage that affects the stability or soundness of the home, or the watertightness if that affects the stability or soundness.

The Peeters-Borsus Act does not impose an insurance obligation for claims that occur before delivery, nor for minor defects. However, statistics show that such claims are the most common. After the introduction of the Peeters-Borsus Act, the protection of the client still shows major gaps: the signal for our government to create more extensive legislation. This resulted in the Peeters-Ducarme Act or the “Law on compulsory professional liability insurance for intellectual professions”, which entered into force on 1 July 2019.

What is the situation like after the introduction of the Peeters-Ducarme Act on 1 July 2019?

The Peeters-Ducarme Act expands the compulsory professional liability insurance for construction actors. Those who exercise an intellectual profession in the construction sector are now obliged to take out insurance for their contractual and extra-contractual professional liability for all construction projects in Belgium. Such professional liability insurance for intellectual professionals in the construction sector covers their liability for errors made in the exercise of their profession, with the exception of the ten-year liability for stability-threatening defects referred to in articles 1792 and 2270 of the Civil Code.

Intellectual professions in the construction industry include architects, engineers, engineering firms, surveyors, safety and health coordinators, environmentalists, landscape architects, urban planners, energy experts, auditors, project managers, quantity surveyors and interior designers.


The insurance obligation of construction actors at a glance


Compulsory construction insurance.PNG

A few more points for attention with regard to compulsory liability insurance in the construction sector

The Peeters-Borsus Act replaced the Laruelle Act on 1 July 2018. Since 2007, the Laruelle Law has required architects* to insure their professional liability. However, the Peeters-Borsus Act only related to the ten-year liability for private housing projects where the intervention of an architect is mandatory. It was a matter of waiting for the supplementary law for the provisions on insurance of professional liability. The Peeters-Ducarme Act only partially fills this gap: architects are now obliged to insure both their ten-year liability for private housing projects (Peeters-Borsus Act) and their general professional liability (Peeters-Ducarme Act). However, the legislator 'forgot' to mention the ten-year liability linked to non-private projects. This is always insured in our policies, so that you as an architect will never be faced with any surprises.

  • Contractors** perform material work and therefore do not carry out an intellectual profession. Therefore, they do not fall within the scope of the Peeters-Ducarme Act and they are not obliged to take out professional liability insurance.

  • Building promoters*** are expressly excluded in the Peeters-Borsus Act and the Peeters-Ducarme Act. They are not required to insure their professional or ten-year liability. However, it is often the promoter who – both during the construction phase and after provisional delivery – is called to account in the event of damage. Moreover, in 98% of cases this target group is not or not properly insured. Building promoters must therefore very consciously weigh up their risks and insurance policies.

  • Expert surveyors and safety coordinators**** were already legally obliged to take out insurance on the basis of the Royal Decree of December 15, 2005 and the Royal Decree of January 25, 2001. The new law entails some changes for them. For example, the legal guarantees must be adapted and a cover of 36 months must be provided if surveyors and safety coordinators cease their activities.

  • Both laws do not change the liability rules themselves. Construction parties that bear responsibility for the stability of a structure are still best to insure themselves, even if the legislation does not oblige them to do so. After all, a party that is held liable for a stability-threatening defect and is not insured for it will bear the costs itself.

  • From now on, all contracts and invoices in the context of a construction project must state the name and company number of the insurance company and the policy number of the liability insurance.

  • In accordance with Article 9 of the Peeters Law, an urban planner***** who carries out his activity as a civil servant with the State, a Region, a community or the Buildings Agency should not be covered by insurance provided that his liability, including of the 10-year liability, is covered by the State (and therefore also the City), the Region, the Community or the Buildings Agency. This rule also applies to this category in the Ducarme Act (Column 4) in accordance with Article 9 of the Ducarme Act (MB 26 June 2019).

  • What about a number of technical professions with regard to the Peeters Act? HVAC (heating, air conditioning, …), domotics, acoustics, sanitary facilities, sewerage, elevators, electricity and insulation techniques (not embedded in the structural works) do not fall within the scope of the Peeters Act according to the legal text. But of course, the activities mentioned can affect the stability of a closed structure and cause serious material damage, for example through slots that are ground in concrete support beams. In itself, this does not have to be a problem in case of decenal damage for which one of these parties may be responsible. 

    Van Dessel - Insurance Brokers

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