Construction insurance is mandatory by law for any project subject to licensing. However, complying with the legal minimum is very different from being truly protected. In most cases, the policies taken out cover little more than the paper they are written on.
The construction sector moves billions of euros in Portugal and involves complex risks: workplace accidents, damage to third parties, design errors, natural phenomena, and project delays. A single incident can jeopardise the entire investment.
Compulsory vs. Recommended Coverages
The compulsory insurance — Works and Construction Public Liability Insurance — only covers the basics. However, there are significant risks that are excluded:
- Damage to works in progress due to natural phenomena (storms, floods)
- Theft of materials and equipment on the construction site
- Cross-liability between contractor and subcontractors
- Design error or structural calculation error
- Additional costs due to delays caused by claims
- Damage to existing infrastructure (pipes, cables, neighbouring buildings)
Who Should Arrange the Insurance
The project owner is legally responsible, but in practice, the policy should protect all involved parties: the project owner, general contractor, subcontractors, designers, and supervisors. A well-structured policy avoids disputes between parties in the event of a claim.
Common Errors We Encounter
- Insured value lower than the actual cost of the works
- Exclusion of subcontractor works
- Lack of coverage for the post-completion maintenance period
- Excessively high excesses for the project profile
- Lack of coverage for materials stored off-site
At Adler & Rochefort, we analyse each project individually and structure coverages that adequately protect all stakeholders. Contact us for a free consultation before starting your next project.