Undeclared Building Activity Invalidates Insurance Cover
Tuesday 05 February 2013
Only those activities declared by a builder to his insurer are covered by the ten year building warranty, a French court has ruled.
As is the case in most other countries of Europe, France has in place a building insurance system that offers a 10 year latent defects guarantee.
The guarantee is called the la responsabilité civile décennale. It is enshrined in statute (Article 1792 Code Civil) and responsibility cannot be waived by contract.
The guarantee operates on a graduated basis over 10 years, with minor work guaranteed for two years, but only major structural work guaranteed for the full 10 year period.
In order to provide a secure framework to the system, builders and architects are required to take out an insurance policy upon which they can call in should they face a claim.
This insurance is called l’assurance responsabilité civile décennale.
Under the 'loi Spinetta' of 1978 it is a legal requirment for a builder to hold such a policy, although many smaller builders do not do so, either because of the cost of the premium, or because they only undertake small building works. Enforcement of the requirement is weak.
In a recent case that was considered by the French Supreme Court, the Cour de Cassation, a claim by a builder on his insurance policy was thrown out by the court as he was not covered for the type of work he had declared to his insurer.
The work undertaken by the builder was air conditioning, an activity not declared on his insurance policy.
They system installed by the builder in the property of his client did not function properly due to incorrect installation, rather than a defect in the equipment itself. As a result, the manufacturer of the equipment could not be held liable.
By the time the case came to court the builder was in liquidation, but as the company had been covered by their 10 year insurance policy when the works were undertaken it was still possible for the client to make a claim on the insurance policy.
In this case, with the builder in liquidation and the insurer refusing to cover the loss, the client was obliged to themselves bear the cost of repair and replacement.
Similar problems arise with third party (public) liability cover of builders who may be business registered for one type of building activity, but who then undertake work for which they are not business registered.
We considered the problems and more general confusion about building insurance in France in our article on Building Warranties Against Latent Defects.