Part of our complete guide to home insurance in Portugal — read the pillar for the full picture on cover, valuation and how to choose.
Building a home in Portugal is not insured by a normal household policy. Until the works are complete and accepted, the project needs construction-phase cover that reflects who owns the site, who controls the works and who could be liable if something goes wrong.
Private clients often hear several terms at once: works insurance, promoter liability, contractor insurance and seguro decenal. They are connected, but they do not do the same job.
What promoter insurance is for
- Liability linked to the person or entity promoting the build.
- Damage or injury affecting neighbours, visitors or third parties during works.
- Gaps where the contractor's policy does not protect the owner adequately.
- Projects where several contractors or trades are active on the same site.
Where seguro decenal fits
Seguro decenal is designed around serious structural defects discovered after completion. It is not a replacement for construction works insurance, site liability or the contractor's own obligations during the build.
What owners should arrange before works begin
- Written confirmation of the contractor's insurance and limits.
- A works policy that reflects the contract value and project timeline.
- Public liability for the site and neighbouring property exposure.
- A plan for the completed home policy before handover.
The strongest time to fix insurance is before the first machinery arrives, not after a neighbour, bank or buyer asks for documents.
A worked example
A couple building near São Brás de Alportel signed with a builder who confirmed he was “fully insured”. He was: he held public liability, and a workers’ compensation policy for his own staff. Neither covers the building under construction.
In the eighth month a fire in a temporary site cabin spread to the partly-completed roof structure. The damage came to roughly €46,000. The builder’s liability policy responded only to the extent he was legally liable, which he disputed, and the dispute ran for eleven months. A contract works policy — which would have cost roughly €900 on a €350,000 build — would have paid the reinstatement in weeks and pursued recovery afterwards. The owners had never been told it existed.
Four different policies, four different jobs
| Policy | What it does | Who normally holds it |
|---|---|---|
| Contract works (todos os riscos de construção) | Insures the works themselves, the materials on site and the plant | Contractor or owner — negotiable, and worth naming both |
| Site public liability | Injury or damage to third parties arising from the works | Contractor |
| Seguro de acidentes de trabalho | Compulsory workers’ compensation for site labour | Contractor, for their own staff |
| Seguro decenal | Ten-year cover for structural defect after completion | Promoter, where the property is built for sale |
| Home multi-risk | Ordinary cover once the building is complete and occupied | Owner, from practical completion |
What the insurer asks at underwriting
- The contract value, the start date and the programme length.
- Whether it is new build, extension or renovation of an existing occupied structure — the last of these is priced quite differently.
- Whether the site is secured and whether plant and materials are stored on site overnight.
- Whether hot works are involved, and under what controls.
- Who the contractor is, and whether they carry their own liability and workers’ compensation.
- The maintenance or defects period sought after completion.
The three mistakes we see repeatedly
- Accepting “the builder is insured” at face value. Ask which policies, with which insurer, to what limit, and ask to be named. A certificate takes a day to obtain.
- Confusing seguro decenal with construction cover. Decenal is a ten-year structural guarantee that bites after completion. It insures nothing while the scaffolding is up.
- Leaving the handover gap open. The contractor’s cover ends at completion. The home policy starts when you arrange it. Between those two dates the property is frequently uninsured, and that is exactly when it stands empty and full of new appliances.
What to do
Tell us the contract value and the expected completion date before the works start, not after. We arrange the works cover and diary the switch to a home policy for the handover date. If the property is a renovation of an existing building, see also renovating a listed or heritage property, and check the document checklist for what you will need at completion.
What it costs
Contract works cover is priced as a percentage of the contract value and is one of the cheapest policies in the market relative to what it protects. On a €350,000 new build in the Algarve, expect roughly €700 to €1,200 for the duration of the works, including the materials on site and a maintenance period after completion. Site public liability, where the owner takes it out rather than relying on the contractor, adds a few hundred euros.
Seguro decenal is a different order of magnitude and a different purpose — it is a ten-year structural guarantee, priced on the construction and usually arranged by the promoter where the property is built for sale. If you are building for yourself, you will not normally need it; if you are buying a newly-built property from a developer, ask whether it exists and ask to see it.
Part of our complete guide to home insurance in Portugal. For a free comparison across Zurich, Allianz, Hiscox and Liberty Mutual, request a quote in 24 hours.
Adler & Rochefort is a commercial brand of Ownizo, Unipessoal Lda., registered with the ASF under no. 425591790/3. General guidance only; conditions, premiums and cover vary by insurer and profile.
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