Insurance rule affecting 140,000 businesses comes into force in a week

Mandatory designer and contractor liability insurance is required by Government Decree 286/2024 (IX.30.) Government Decree stipulates compulsory designer and contractor liability insurance for all designer and contractor contracts to cover damages caused to third parties, according to a statement sent to our newspaper by ÉVOSZ.

The liability insurance contract concluded between insurers and contractors also covers cross-border design and construction activities, but not public works.

In practice, the client has insisted on liability insurance for high-value works, and for notifiable installations - which are mostly residential - the law has required it.

Typically, however, in the case of small value establishments, the self-employed, micro and small entrepreneurs, there is a lack of compensation for damage caused to third parties and the necessary cover. In order to avoid legal problems, to give the profession a more positive image and to ensure a level playing field, ÉVOSZ has for several years been calling for and advocating the introduction of compulsory liability insurance for all those involved in design and construction. Liability insurance also serves the interests of our clients by settling unforeseen claims involving parties in the vicinity of construction and design works.

Designers can also benefit

<In the case of Designers, the liability insurance must cover damage caused by a breach of the professional standards, rules and provisions of the design contract. Contractors, the liability insurance must cover damage caused by a breach of the professional standards, rules and provisions of the design contract.

Damages may include personal injury and damage to property, as well as damage awards in connection with these damages. Liability insurance also covers damages arising from the activities of persons employed by the design-builder or other persons having an employment or other legal relationship with the design-builder, as well as subcontractors.

The ÉVOSZ calls on insurance companies and insurance brokers not only to see the business opportunities for insurance in the liability insurance obligations of contractors, but also to provide businesses not used to such insurance with the necessary information and advice.

A big task for chambers and insurers

Public chambers, which register the existence of liability insurance, will come under heavy pressure from design and construction companies in the coming days, which could cause tension. However, clients will soon be able to obtain up-to-date information from the chambers' databases on the liability insurance of the design and construction companies they select.

A government decree sets out in detail the categories of amounts of liability insurance linked to the annual turnover and the insurance anniversaries to be taken into account. Existing liability insurance policies must also be adapted to the provisions of the Government Decree.