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Construction and all-risk insurance
A construction project is a risk that changes every week and involves the developer, contractor, and subcontractors. The cover accompanies the entire schedule: work in progress, testing, reception, and the ten years that follow.
In short
What is construction insurance
The all risk construction insurance (TRC) covers damage to the work in progress and liability to third parties during the construction period. The decennial insurance is different and mandatory in residential building: it guarantees structural damage affecting the building's stability for ten years and requires the control of a technical control organisation from the project. Both complement each other and cover different phases of the construction's life.
Advantages
Advantages of construction insurance
On site, insurance is not an administrative formality: it is what allows signing, executing deeds, and getting paid.
No ten-year insurance, no deed
The notary and the registry require proof of it to register the new residential build. Without it, there is no delivery, no deed, and no payment.
Access public tender
Tender and performance guarantees are a condition for admission to the competition. Having them resolved and agile determines how many awards you can apply for.
The project continues after the incident
A partial collapse or a storm is resolved with reconstruction financing within weeks, without consuming the cash flow that supports the rest of your projects.
Avoid litigation with the subcontractor
With all parties designated as insureds, the damage is resolved within the policy instead of ending in cross-claims between companies that must continue working together.
Profile
Who we work for
Developers
Developers obliged to decennial and guarantee of advance payments, with liability to buyers for a decade.
Construction companies and contractors
Companies responsible for the executed work, subcontracting, and damage to adjacent properties.
Engineering and industrial assemblies
Installation projects with testing and commissioning, where the risk is concentrated in the testing phase.
Civil works and concessions
Public tender awardees with requirements for guarantee and extended liability.
Technical criteria
Where projects break down
In construction, the problem is usually not the absence of a policy but its temporal and subjective fit.
Uncovered maintenance period
The work is received and the TRC expires. Defects that appear in the following months remain uncovered if the extended maintenance period was not contracted.
Subcontracts outside the insured
If subcontracts are not listed as insured, the insurer indemnifies and then recovers from them, creating commercial conflict in the work.
Undervalued damage to adjacent properties
Urban excavations in party walls generate the most expensive and frequent claims, and the contracted sublimit is often insufficient.
Decennial contracted late
The decennial requires OCT from the project. Contracting it with the work advanced increases the premium or directly prevents insuring it.
Scope
Main covers of construction insurance
- All risk construction and assembly on the executed work, materials and work equipment
- Operational, cross and employer's liability during execution
- Damage to pre-existing property and adjacent constructions
- Trial period and commissioning in industrial assembly
- Maintenance period and warranty after receipt
- Ten-year structural damage insurance with OCT, and guarantee of advance payments
The definitive scope depends on the wording of each insurer. We review it with you before recommending anything.
The JORI& method
Cómo trabajamos
El mismo método en cualquier solución: entender la exposición real antes de mirar una prima.
Análisis del riesgo
Estudiamos la actividad, el patrimonio y los escenarios plausibles. Sin ese diagnóstico, comparar pólizas es comparar precios de cosas distintas.
Diseño del programa
Definimos coberturas, límites, franquicias y exclusiones aceptables. Decidimos qué se transfiere al asegurador y qué se retiene de forma consciente.
Negociación con el mercado
Presentamos el riesgo a las aseguradoras con las que trabajamos y negociamos condiciones. Somos independientes: no pertenecemos a ninguna compañía.
Acompañamiento y siniestros
Revisamos el programa cada renovación y, cuando ocurre el siniestro, actuamos como tu parte técnica frente al asegurador hasta el cobro.
Frequent doubts
Lo que más nos preguntan sobre construction insurance
When is ten-year insurance mandatory?
In residential building, in accordance with the Building Regulation Act. It is a requirement to register the new build and to execute the deed. In non-residential construction, it is not mandatory, although many financiers and buyers still require it.
What does the guarantee of advance payments cover?
It guarantees buyers the return of the amounts paid before the delivery of the property, plus interest, if the work is not completed or not delivered on time. It is mandatory from the first payment and its absence results in direct liability for the developer.
Who should take out the CAR, developer or builder?
Either can take it out, but the key is that all parties involved are listed as insured. We recommend that the developer takes it out and designates the builder and subcontractors as insured, as this avoids conflict over subrogation within the project itself.
What are LEG clauses and why do they matter?
They are market clauses that define the extent of defect cover. LEG1 excludes all defective parts, LEG2 covers resultant damage excluding the defective part, and LEG3 is the most comprehensive. The difference between them can amount to millions in a structural claim.
Does the policy cover damage from rain or flooding on site?
Ordinary phenomena are covered within the CAR. Extraordinary ones are covered by the Consorcio. In projects with deep excavation or nearby watercourses, we negotiate specific sub-limits, as this scenario produces the most total claims.
How long does liability last after project delivery?
Ten years for structural damage, three for habitability damage, and one for finishes, according to the LOE. The ten-year insurance covers the first period; for the other two, it is advisable to maintain post-completion liability cover.
Construction
Insurance alignment of the project, before setting out
We review the alignment of CAR, ten-year, liability and guarantees of your project before the work begins, and identify the areas where no one is covered.
- Independent broker: we do not belong to any insurer
- The specialist in the field you consulted answers you
- The review is delivered in writing, policy by policy
Insights
Ver el tema property risks What we have written about this
Nota técnica
All risks construction: the four stages where cover is decided
The work is not a homogeneous period. Testing, reception, maintenance, and ten-year guarantee respond to different logics and to different policies.
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Loss of profits: the indemnity period that almost no one calculates correctly
Twelve months is the market standard and a decision that is rarely reviewed. In many industries, it is not even enough to replace the critical machine.
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Underinsurance: why many warehouses would receive half of what their owner believes
The proportional rule is the clause that costs the most money in Spain and is almost never discovered until the day of the claim. How to detect it beforehand.
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