No other sector accumulates so many insurance obligations by contract: the tender documents, the client's framework agreement, the coordination of activities and the statute itself all converge on the same site.
In construction, insurance is not a risk management decision, it is a condition of entry. Without a current liability certificate you do not get onto the client's site; without a performance bond the public contract is not signed; without the guarantee required by the Spanish Building Act the finished works are not registered. The programme is designed, to a large extent, against a list of documents somebody is going to ask for.
The second particularity is concurrence. A site has the developer, the main contractor, subcontractors and self-employed trades all working at once, and when damage occurs it takes months to establish who is liable while claims move from one policy to another. Coordinating who answers for what — and checking that every link in the chain has its own cover — is the work that keeps the gap off your own accounts.
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Construction is the sector where insurance is bought least out of conviction and most because somebody else demands it. A tender sets a minimum liability limit; a large client's framework agreement sets another; the coordination rules require a certificate before anyone sets foot on site; and the Building Act imposes a guarantee that outlives handover by ten years.
The result is a programme that has to be designed looking at two things at once: the company's actual exposure, and the list of documents somebody is going to ask for.
Law 38/1999, the Spanish Building Act, sets out three guarantees against physical damage in its article 19: one year for finishing elements, three for those affecting habitability requirements, and ten for structural damage compromising the mechanical resistance and stability of the building. All three may be provided by damage insurance or by a surety bond, and its second additional provision determines which is mandatory: the ten-year one, for buildings whose main use is residential.
Law 32/2006 on subcontracting requires contractors and subcontractors to have their own productive organisation, to assume the risks of the activity, to evidence prevention training at management and operative level, and to be entered in the Register of Accredited Companies.
And Royal Decree 171/2004, implementing article 24 of the Occupational Risk Prevention Act, turns the liability certificate into the key to the site: without it there is no entry, with the crew already on their way.
The first is the declared activity. A company that started out building structures and now also installs, assembles or transports has widened its exposure without widening its wording, and finds out when the insurer declines the claim for undeclared activity.
The second is the sub-limits on the critical sections. On site, what decides a serious loss is not the general limit but the sections for adjoining property, buried services and property being worked upon. A generous general limit sitting above short sub-limits in those three is a figure that will never be reached.
The third is the uncertified subcontracting chain. The contingent section covers your liability, not the contractor's. If the link that caused the damage has no policy and you are jointly liable, the gap is yours even though somebody else caused the damage. We set this out in what documentation to require from a contractor.
As a brokerage registered with the Spanish insurance regulator, the Dirección General de Seguros y Fondos de Pensiones, under reference J0140, New Brokers acts on the client's mandate, not on any insurer's behalf.
In construction that shows in two unglamorous and very expensive places. One is issuance: certificates in the exact wording each tender requires, on time, without holding up the works. The other is coherence between contracts: making sure contractors' all risks, liability, the structural guarantee and the surety facility are coordinated with each other and with what the signed contracts demand, rather than being four policies bought separately that nobody has read side by side.
Contractors' all risks covers the works while they are being built, including materials on site, plant and, if agreed, the maintenance period after handover.
Defects affecting foundations, supports, beams, floor slabs or load-bearing walls that compromise the stability of the building. They answer for ten years, once the works are handed over and paid.
Harm to neighbouring buildings through excavation, vibration or undermining, and rupture of water, gas, electricity or telecoms lines: low frequency and disproportionate cost.
The highest accident rate of any sector, aggravated by companies working alongside each other and by work at height, which drives the employers' liability claim beyond social security benefits.
Liability attributed to you for the acts of companies working for you. The contingent section covers your liability, not the contractor's, who must carry their own.
Live bonds across several simultaneous contracts, and retentions held back from invoices, lock up working capital for the whole maintenance period.
Cranes, platforms and mobile plant, exposed to their own damage, to third-party liability and to theft on sites without effective fencing.
Discovering contaminated ground or an accidental spill during construction, which general liability excludes and which can stop the works.
The obligations that, in this sector, trigger the purchase of a specific cover.
| Rule | What it requires |
|---|---|
| Law 38/1999, the Spanish Building Act (LOE) — View the legislation | Its article 19 sets out three guarantees against physical damage — of one, three and ten years — which may be provided by means of damage insurance or a surety bond. The second additional provision determines which is mandatory: the ten-year guarantee under paragraph 1(c) is required for buildings whose main use is residential. The one-year guarantee may be replaced by the developer retaining 5% of the value of the works. |
| Law 32/2006 on subcontracting in construction — View the legislation | Its article 4 requires contractors and subcontractors to have their own productive organisation, to assume the risks of the activity, to evidence occupational risk training at management and operative level, and to be entered in the Register of Accredited Companies. |
| Royal Decree 171/2004 on coordination of business activities — View the legislation | Implements article 24 of Law 31/1995. On site it means the operator of the workplace requires every company working there to produce a current liability certificate, expressly mentioning the employers' section and a minimum limit, before granting access. |
| Royal Decree 1627/1997 on health and safety on construction sites — View the legislation | Sets the minimum health and safety requirements on construction sites, including the health and safety study and the role of the coordinator. Failure to comply is the usual basis for the surcharge on benefits and for the employers' liability claim. |
| Law 9/2017, the Public Sector Contracts Act — View the legislation | The successful bidder must provide a performance bond of 5% of the final tendered price, VAT excluded, and its article 108.1 admits doing so by means of a surety insurance contract. A bid bond is required only exceptionally and with stated reasons, capped at 3% of the tender base budget. |
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Go to the client areaThe operator of the workplace, applying the coordination rules, requires every company working there to produce a current liability certificate mentioning the employers' section and a minimum limit.
What it means
Without that document there is no entry, and the job stops with the crew already on their way. Issuing the certificate quickly, in the exact wording each tender requires, is administrative work that decides whether anyone works that day.
An excavation causes settlement or cracking in the neighbouring property, and the claim arrives from the adjoining owner and their insurer.
What it means
Contractors' all risks, the adjoining property section of the liability policy and, if services were ruptured, the buried services section all operate at once. If one is missing or carries a short sub-limit, the contractor absorbs the gap.
Damage appears in structural elements of a residential building handed over eight years earlier, when the job is closed and the team that built it no longer exists as such.
What it means
The ten-year guarantee under article 19.1(c) of the Building Act responds, and it is mandatory for residential construction. It is the only stretch of the programme still live almost a decade after invoicing, which is why the technical documentation deserves to be kept for all of it.
Covers the works in progress through contractors' all risks and the ten-year structural liability on the finished building.
It is the policy behind the certificate the coordination rules demand, and the one that answers for adjoining property, buried services and the employee's claim.
Provides the tender guarantees and the maintenance retentions without consuming the company's bank credit line.
Protects fixed premises, stores and plant yards independently of whichever site is being built at the time.
Earthworks and the discovery of contaminated ground fall outside general liability and require their own policy.
Mobile plant and site vehicles have their own insurance regime, distinct from that of fixed machinery.
Four covers form the core: general liability with employers' and subcontractors' sections, which is what backs the certificate that tenders and the coordination rules demand; contractors' all risks on the works in progress; the ten-year structural guarantee where the building is residential; and a surety facility for tender guarantees and retentions. Plant, fleets and environmental liability are added according to the activity. The scope of each is governed by the specific conditions of each policy.
Law 38/1999 sets out three guarantees in article 19 — of one, three and ten years — and refers to its second additional provision to determine which is mandatory. Under that provision, the ten-year guarantee in paragraph 1(c), covering structural damage, is required for buildings whose main use is residential. The one and three-year guarantees are not compulsory unless established by royal decree. The specific case is worth checking, because the provision itself contemplates particular situations such as the self-developer.
Contractors' all risks covers damage to the works themselves while they are being built: it is damage insurance on an asset still under construction. Liability covers the damage those works cause to third parties outside them: the neighbour, the passer-by, the buried service. They are complementary and neither replaces the other; a well-built programme coordinates them so no stretch is left between the two.
Yes. Article 108.1 of the Public Sector Contracts Act admits three ways of providing the performance bond: cash or government securities, a guarantee from a credit institution or mutual guarantee company, and a surety insurance contract with an insurer authorised to write that class. Towards the authority they have the same effect, but the bank guarantee counts against the company's bank exposure and the surety bond does not, which for a contractor tendering continuously decides how much working capital is left available.
It depends on the wording. The contingent liability section for contractors and subcontractors covers the liability attributed to you for their acts, whether direct, joint or contingent, but it does not cover the contractor's own liability, for which they must carry their own policy. That is why the coordination rules require a certificate from every link: if a subcontractor has no cover and you are jointly liable, the loss ends up on your accounts.
A description of the actual activity and its business code, turnover by type of works, the payroll, the detail of the subcontracting chain, the schedule of plant, live bonds with their expiry, and any tender documents or framework agreements imposing minimum limits. If you have them, the current policies with their specific conditions, so the comparison is like for like.
Contractors' all risks is not a liability policy: at its core it covers what happens to the works, not what the works do to other people. A map of the layers protecting a project and the hinge that separates them.
Read→
The LOE's decennial guarantee requires liability for ten years for damage affecting a building's stability and structural soundness. We examine its scope, the liable parties and decennial damage insurance.
Read→This information is for guidance only and is not binding. Covers, limits and exclusions are governed in all cases by the specific terms of each policy. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.