Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. A project owner has been operating an accepted line for four months while the contractor finishes the other two. An erection defect damages that line. What decides first which policy answers?
The fact that the section is accepted and in operation, most wordings then ceasing to cover it under erection
The cause comes second, not first. An erection policy covers a structure under construction, and a section accepted then operated has become a production asset: most wordings stop covering it, absent an express early commissioning clause. The file then shifts to the operator's damage policy, which ordinarily excludes inherent defect in the damaged item itself, that is, precisely the erection defect. A scheduling decision thus decides the cover.
Glossary entry · assurance-construction2. A project owner takes possession of a structure, pays the balance and operates it, with no minute ever signed. What follows?
Acceptance may be held to be tacit, with all its effects, and will be established after the fact, often before a judge
Acceptance is a legal act that is also inferred from conduct. Taking possession, paying the balance and operating show the intention to accept. It is the most dangerous form, because it is not established when it occurs but later, at a moment when somebody has an interest in placing it elsewhere: each party will argue for the date that suits it, and acceptance's three effects, transfer of custody, start of statutory warranties, end of construction cover, move with it.
Glossary entry · assurance-construction3. A policy excludes defective design but covers resulting damage to other parts of the works. A faulty weld ruptures a pipe, which floods a room. What does the split of the amount actually turn on?
On the definition of the defective portion: the weld alone, or the whole pipe
The principle is settled as soon as the clause is read: the defect is out, consequential damage is in. What remains to be decided, and what drives the amount, is the carve-up. If the defective portion is the weld, almost the whole loss is covered. If it is the whole pipe, the excluded share becomes considerable. Wordings speak of damaged unit, defective portion or defective item, and those words do not cover the same ground; that is where the file is negotiated, not on the principle.
Glossary entry · vice-propre4. A supplier delivers 48 non-compliant anchorages. Two corrode and damage the deck; the other 46 are intact but out of specification. Under which defect wording is the replacement of the 46 covered?
Under none: replacing a non-compliant but undamaged item is not a loss, it is a recourse against the supplier
A damage policy indemnifies damage, and 46 intact anchorages have suffered none. Replacing them corrects a defective delivery: that is performance of the supply contract, therefore a recourse against the supplier, under any of the three wordings. A project owner building its insurance file around those 46 items is fighting the wrong opponent, and the genuinely arguable part is far narrower than it looks.
Glossary entry · vice-propre5. On a large project, where is the answer read to the question whether the defect exclusion covers only the insured's own defect or anyone's?
In the definition of the insured, often thirty pages earlier
The exclusion says what is excluded, not whose. On a policy written in the name of all parties, which is the rule for project-wide policies, the exclusion applies to a defect committed by any one of them, including the party the insured did not choose and could not supervise. A policy excluding only the insured's own defect, conversely, leaves a neighbor's defect covered. The nuance is therefore not read where one looks for it.
Glossary entry · assurance-construction6. A project is 45 days late for vessel unavailability when a covered fire adds 126 days. The delay cover's deductible is 60 days. How many days are indemnifiable?
66 days, the 126 attributable days less the deductible
Two operations, in that order. First isolate the delay attributable to covered physical damage: the 45 vessel days are not, and would have occurred anyway, so they drop out. Then apply the deductible in days to the remaining 126, leaving 66. Reversing the two operations, or deducting the deductible from the total delay, overstates the indemnity by 45 days and builds the whole negotiation on a wrong figure.
Glossary entry · perte-exploitation-anticipee-alop7. A seven-month commissioning delay is caused by a prolonged strike at an equipment supplier. What does advance loss of profits cover owe?
Nothing, absent covered physical damage at the origin of the delay
The substantive condition declines more files than all the amount bounds combined: the lost revenue must result from physical damage that is itself covered. Strike, component shortage, refused permit, supplier failure: none is physical damage, so none opens anything. The cover is narrow by construction, even though the causes of delay on a large project are mostly immaterial, and that is the commonest source of disappointment.
Glossary entry · perte-exploitation-anticipee-alop8. How does quantifying an advance loss of profits differ from quantifying an ordinary business interruption?
There is no operating track record: the amount is built on a business plan, and the wording says whether it is the filed one or current conditions
Classic business interruption starts from the insured's accounts and corrects a known trend. Here the asset has never operated and no reference year exists: one insures a hypothesis. Hence the importance of knowing which one the contract retains. The filed business plan fixes everything and makes the computation mechanical; prevailing economic conditions are fairer and open an endless debate. A producer whose market price has doubled between placement and loss does not defend the same clause depending on which one it signed.
Glossary entry · perte-exploitation9. Equipment bought for a project waits eleven weeks in a warehouse rented fifteen kilometers from site, and burns. What is the first point to check?
Whether the off-site storage extension exists, and whether the address was declared
The question is not one of cover but of scope: the goods were not on site. Almost all construction policies cover off-site storage, but on express conditions, with a sub-limit and prior declaration of the address. Eleven weeks of undeclared storage is the commonest route to a decline, and that decline mechanically carries the decline of the delay cover, which requires covered physical damage at its origin. An administrative omission then governs two thirds of the file.
Glossary entry · assurance-construction10. On a project-wide policy, what does the waiver of subrogation between insureds leave intact?
The project owner's contractual action for what is not indemnified, starting with the deductible and delay penalties
The waiver extinguishes the subrogated insurer's recourse against a co-insured, because one does not turn against one's own insured. It does not touch the construction contract, which carries delay penalties, the performance bond and liability for uninsured overruns. A loss settled without argument by the insurer can therefore be followed, six months later, by proceedings between the same parties: the waiver pacified the damage layer, not the contract layer, which is often the heavier one.
Glossary entry · subrogation11. A project-wide policy places the deductible on the responsible company. The loss originates with a supplier of the project owner, which is not a named insured. Who bears the deductible?
The project owner itself, no insured company being responsible
The clause targets the responsible company among the insureds, and there is none here. The deductible therefore falls back on whoever placed the policy, that is, the project owner, which is not what the clause meant but is what it says. On the favorable side, the supplier not being an insured, the waiver of subrogation does not protect it, and the paying insurer will be able to turn against it, which also leaves the project owner its own action for the uncovered share.
Glossary entry · franchise12. An industrial complex is accepted in sections, the first eighteen months before the last, with a twelve-month maintenance period per section. What is the costliest effect of that carve-up?
The oldest section can be out of warranty on the day of the complex's first full-load test, when defects surface
Each section carries its own period, running from its own acceptance. A first section accepted eighteen months before the last therefore sees its twelve-month warranty expire six months before the complete installation first runs at full load, that is, at the precise moment execution defects are most likely to surface. The carve-up was decided for scheduling reasons, and it produces a gap nobody wanted and nobody looks at until something happens.
Glossary entry · tous-risques-montage-ear13. Fifty-year rain fills an excavation without damaging the works. The site stops for twenty-two days. What is the project owner's position?
It bears everything: force majeure relieves the contractor of penalties, and the absence of physical damage closes the delay cover
This is the only case where both protections fall away at once, and large weather events produce it more often than anything else. Force majeure lives in the works contract and relieves the contractor once the event is unforeseeable, irresistible and external. The delay cover lives in the policy and requires covered physical damage at its origin: water in an empty volume is not damage. The project owner therefore collects neither penalties nor indemnity.
Glossary entry · force-majeure14. An identical design defect appears on several units of a series of sixty. What decides the amount borne by the insurer?
The aggregation clause: one loss or sixty, therefore one deductible or sixty and a limit exhausted or not
A serial defect is not a severity problem, it is a numbers problem. The same damage read as sixty separate losses triggers sixty deductibles and leaves the limit intact; read as one loss, it triggers a single deductible but can exhaust the limit at once. The gap between the two readings runs to millions, and it turns on a clause that had to be read before ordering sixty identical units.
Glossary entry · sinistralite-attritionnelle15. When does a large construction site reach its exposure peak, and what reduces that peak?
A few weeks before commissioning, when everything is there and nothing protects it yet; it is reduced by the supply schedule
Present value is a curve, not a figure, and it peaks at the end, at the very moment of the testing period, whose loss experience is already the worst: the two peaks multiply rather than add. On an operating site one would reduce that risk by adding means; on a construction site those means cannot exist before the structure carries them. What remains is to spread deliveries, because that alone acts on the present value at the moment of the event.
Glossary entry · pml16. An erection policy includes twenty-eight days of testing from the first test. The site tested for four days, shut down for nineteen days waiting for a part, then resumed testing. Where does the window stand on the twenty-eighth calendar day?
The window is spent: the period runs in calendar days from the first test, shutdowns included
The common wording runs the window in calendar days from the first test, whatever its nature, and not in days of actual testing. Nineteen days waiting for a part therefore consume the cover exactly as nineteen days of testing would, with no test taking place. Suspension during the shutdown, and a period restarting on resumption, describe wordings that do exist but are the exception and must be read in the contract before being relied on. What matters is the direction of travel: a testing campaign that stretches out is that of a project going badly, therefore the one with the highest probability of damage, and it is at that same moment that cover runs out.
Glossary entry · tous-risques-montage-ear17. Physical damage occurs seven days after the testing window closed and delays commissioning by seventy-four days. The delay in start-up cover attached to the policy carries a thirty-day deductible. What does it owe?
Nothing, for want of covered physical damage for it to attach to
Delay cover is not a standalone cover: it indemnifies the financial consequences of covered physical damage, and if that damage is not covered it has nothing to attach to. The delay is nonetheless real, it is measurable, and its amount often exceeds that of the damage itself, which makes the conclusion counterintuitive. There is no pro rata split here: the damage is covered or it is not, there is no half loss. The practical consequence is that one calendar date, the closing of the testing window, decides two covers at once, and the heavier of the two falls without ever being argued.
Glossary entry · perte-exploitation-anticipee-alop18. An item is discharged from the vessel on March 14. Cargo cover ends on delivery at destination or sixty days after discharge, whichever comes first. The substation is not ready, the item waits on a port laydown area, and a fire damages it on June 2. What decides the file first?
That cargo cover ended on May 13, with no delivery to site able to start the construction policy running
The two contracts follow one another, they do not overlap, and between them lies an interval that the site's delay lengthens on its own. Cargo cover is counted in days from discharge, it runs out on the quay while the foundations are being finished, and the construction policy cannot take over since its trigger is receipt on site, which has not happened. So this is not an allocation between two insurers, it is an absence of cover, which is a different and far worse file. The amount is argued only afterwards, and it will not be argued here: neither the off-site storage extension, which presupposes a declared location, nor the limit per location is even reached.
Glossary entry · facultes-marchandises-cargo19. A contractor changes its construction method fourteen months into the works to claw back a delay. The decision appears in site minutes and in a method statement signed off by the design supervisor, but is communicated to neither the broker nor the insurer. A loss of 8.4 million euros occurs eleven months later, and the insurer establishes that its rating would have been increased by 90%. Where is the file decided?
On proportional reduction of the indemnity, the omission appearing to be in good faith on the written record
The loss is sudden damage to works under construction, so exactly what the policy covers: looking for an exclusion leads nowhere, and the deductible is not recalculated, it is what the contract says. The file turns on disclosure, and the split between the two regimes turns on good faith. Nullity requires bad faith, which runs into the facts here: a decision recorded in minutes and signed off by the design supervisor is the opposite of concealment, a contractor that hides does not minute. What remains is the reduction in the ratio of the premium paid to the premium that would have been due, roughly 4.4 million instead of 8.4. What to remember of its mechanics is that it appears in no exclusion, no deductible and no limit: the retained share is invisible in the three places one usually looks.
Glossary entry · declaration-de-risque20. A project is insured for 180 million euros, the final value provided for in the contract. Three years later, variations and price revision bring the actual final value to 220 million. A 12 million loss occurs when the works already built are worth about 90 million. On what ratio is the proportional rule of capitals computed?
On 180 against 220, underinsurance being measured against the value of the completed works
The intuition comes from insuring an existing asset, where the sum insured is compared with the value on the day of the loss. On a construction site the benchmark is different: the sum insured is the value of the COMPLETED works, and it is against that actual final value that underinsurance is measured, even for a loss occurring a third of the way through. Comparing the loss with present value, or present value with the sum insured, is the wrong division, and the fact that the loss is small next to the sum insured protects against nothing: the ratio of 180 to 220 applies whatever the amount. What must then be seen is that the same ratio also strikes the ancillary heads, debris removal and fees, whose sub-limits are computed as a percentage of a sum insured left at its first-day level.
Glossary entry · principe-indemnitaire21. A crane belonging to a co-insured subcontractor overturns through that subcontractor's outrigger setting error. The policy excludes construction plant belonging to the insureds, and the insurer waives recourse against any insured. Where does the subcontractor stand on its crane and on the deductible borne by the main contractor?
Its crane is excluded as property belonging to an insured, and the main contractor may still claim the deductible from it under the subcontract
Being an insured here reduces cover instead of extending it: by joining the contract, the subcontractor moved its crane into the category of property belonging to an insured, which the policy excludes, whereas it would otherwise have remained third-party property. And the waiver of subrogation has only the effect it is given: it extinguishes the INSURER's subrogated action, it does not touch the contractual relationship between main contractor and subcontractor. The deductible and the penalties provided for in the subcontract therefore remain claimable, all the more so because the loss has been fully indemnified elsewhere. The subcontractor leaves this loss with its crane gone, the deductible and the penalties, without any of those three lines being a declinature.
Glossary entry · renonciation-reciproque-responsabilite22. Under an all risks construction policy, a structure collapses and the insurer invokes the design defect exclusion. What must each of the two parties establish?
The insured establishes the damage, its occurrence within the period and its fortuitous character; the insurer establishes the defect AND its causal role
The all risks label is not a marketing one, it allocates the burden of proof. The insured does not have to establish the cause: it need only establish the damage, its occurrence within the insured period and scope, and its fortuitous character. It is then for the insurer, if it wishes to escape cover, to prove the exclusion in all its elements, and the design defect exclusion has two, the second of which is almost always neglected: it is not enough that the design was defective, that defect must have played a causal role in the damage observed. A badly designed structure that collapses for a reason unrelated to its defect remains covered. The practical consequence is that an insured who sets out to find the cause in order to persuade is working against itself, supplying the material for an exclusion it never had to establish.
Glossary entry · contrat-aleatoire23. An industrial company builds, under a single permit and a single contract, a production workshop and a three-story office building open to the public, on the same plot. What determines whether the French regime for pre-financing structural defects applies?
The nature and use of each structure taken separately, the boundary running through the project rather than around it
Scope follows none of the logics a project's assembly suggests: neither size, nor amount, nor the standing of the owner, nor the acceptance date determines it. It is read structure by structure, on the nature and use of each, and that is what makes the case a trap: an office building open to the public does not escape the regime because it shares a plot, a permit and a contract with a workshop that may itself escape it. Reasoning from the industrial character of the whole applies to the building a classification that is not its own. It must be added, so as not to err the other way, that this cover funds the repair of the defect and nothing else: business interruption, loss of enjoyment and rehousing stay outside its object.
Glossary entry · canalisation-responsabilite24. On a project insured under a single policy bought by the owner, one technical package refused to join and keeps its own policy. A fire starting in its cabinet damages the structure, insured under the single policy. What happens to that package left outside?
Not being an insured under the contract, it is not covered by the waiver of subrogation, and the insurers that paid for the works have a recourse against it
The single policy does exactly what is asked of it: it repairs the works without first having to establish who broke them, and it is that service, more than price, that explains its use on large projects. But it does not abolish liability, it shifts when liability arises. Once the works are paid for, the coinsurers exercise their subrogated recourse, and they can exercise it only against a party that is not their insured. The package that refused to join therefore kept a premium and lost the main protection joining would have given it. Note that the waiver of subrogation would not have protected it from everything in any case: deductible and delay penalties are settled through the works contracts, whatever the insurance configuration.
Glossary entry · coassurance25. A covered fire pushes commissioning back by 103 days. The contract provides for 9,000 euros of penalty per day, with no relief for this event. Delay cover carries a 30-day deductible, a daily ceiling of 21,000 euros, and deducts from the indemnity the penalties due for the same delay. Actual daily gross margin is assessed at 17,500 euros. What does the insurer owe?
350,500 euros, that is 73 days at the actual margin, less the 927,000 euros of penalties due
Two errors present themselves first, and they look alike. The daily figure written into the contract is a computation ceiling, not a sum owed: the indemnity makes good an assessed margin, so 17,500 and not 21,000, giving 1,277,500 euros over 73 indemnifiable days. And that 1,277,500 does not stack with the penalties: the deduction clause exists to stop the same loss being made good twice, so the insurer owes the difference, 350,500 euros. The project owner does receive 1,277,500 in all, but three quarters of it comes from its contractor. What to carry forward sits in one word of the wording: the deduction bears on penalties DUE. Waiving them to preserve a commercial relationship does not hand them to the insurer, it gives them up for nothing.
Glossary entry · franchise-temporelle26. An underwriter looks at a battery storage site using a cell generation deployed for eighteen months, with no loss history. Available are a zero-incident report over fourteen months of a pilot site ten times smaller, a technical file on spacing and detection, and an offer to share cell-by-cell temperature measurements. Which of these carries the most information?
The offer to share measurements, the only one producing new data, manufacturing the missing history before the first loss
The zero-incident report is the most attractive and least informative document: fourteen months on a site ten times smaller has not produced the hundreds of full cycles after which cell failure modes appear, and an absence of events on a short sample is consistent with almost any frequency. The technical file is useful but not for judging the cell, about which nobody knows anything: it serves to judge what happens WHEN a cell goes, that is, whether the event is one container or the whole site. As for declining, that confuses uncertainty with high risk, and a new technology is sometimes less loss-prone than a mature one. What remains is the only resource that produces data instead of consuming it: an instrumented asset manufactures its own history, and it does so before the first loss rather than after.
Glossary entry · tarification-exposition27. A refurbishment keeps the facade of an 1890 building and digs two basement levels. Dewatering cracks the retained facade and the adjoining building. No joint condition survey was carried out, no preventive court survey applied for, and the owner's property policy withdrew when the site opened. Which line is most compromised?
The retained facade: it is not the works under construction, the property policy withdrew, and the existing property extension is conditional on a condition survey that does not exist
The neighbor is the best placed line, contrary to intuition: abnormal neighborhood disturbance relieves it of proving fault and of naming a responsible party among the contractors, it need only establish that its crack comes from the site, which dewatering settlement shows without difficulty. The retained facade is elsewhere. It is not the works under construction, since it existed before; the owner's property policy withdrew as its contract provides once substantial works open; and the construction policy's existing property extension, the only remaining route, is conditional on a condition survey that was not carried out. On 1890 fabric nobody will be able to establish that the cracks post-date the works, and that showing falls on the party claiming. The two missing documents are not formalities: they are the only ones that manufactured the proof, and they are applied for before the site opens.
Glossary entry · responsabilite-sans-faute28. A building designed in 2020 and under construction since 2023 burns in 2025. Like-for-like reconstruction is worth 7.4 million euros, but fire regulations were tightened in 2024 and permission to rebuild requires 1.9 million of additional works. The policy carries an upgrade extension capped at 10% of direct damage. How is that extra cost treated?
The extension takes it up to 740,000 euros, and the remaining 1.16 million is a cap applying, neither an exclusion nor a dispute
Works are rebuilt under the regulations of the day of repair and not of the day of design, so the extra cost is real and is not a repair: it is an improvement imposed by law. Policies handle it in three ways, outright exclusion, a capped extension, or admission subject to the case where compliance was already mandatory before the loss. Here the second applies, and its cap is set as a percentage of direct damage, that is, on a quantity bearing no relation to the scale of a regulatory tightening. Note that this 1.16 million shortfall cannot be argued: it results from no declinature, only from a cap chosen at placement, at a time when the 2024 tightening did not yet exist.
Glossary entry · principe-indemnitaire29. Deck waterproofing is laid by an unapproved third-tier crew. Eighteen months after acceptance, a laying defect costs 3.4 million euros. The single policy's maintenance period has expired, the intermediate package holder is wound up, and the second-tier specialist firm is insured for building waterproofing and not for civil engineering structures. Where does compensation stop, and why?
At the wound-up link: without privity, compensation climbs the tree link by link, and everything below becomes unreachable by that route
Four doors, and they close in an order worth knowing. The single policy no longer responds, its maintenance period having expired, and no automatic extension exists for latent defects. The project owner has no direct action against a party it did not contract with, outside the particular cases the law provides for: its claim climbs the tree, and it stops at the wound-up link, not for want of liability but for want of privity. That leaves the second-tier insurer, and the gap between building waterproofing and structural waterproofing is not one of drafting: it bears on distinct techniques, constraints and loss experience, and the certificate produced at the start was true while proving nothing that mattered. What would have changed the outcome cost nothing: checking the declared activity on arrival, and refusing an unapproved crew.
Glossary entry · responsabilite-du-fait-d-autrui30. Settlement is observed on May 19 on a site; the site props, makes good and carries on. On July 3 a collapse damages the works to the tune of 4.6 million euros, notified on July 9. The policy requires notification within five working days of awareness of the loss, on pain of forfeiture stipulated in conspicuous characters. What must the insurer establish for forfeiture to operate?
A prejudice the delay caused it: inspection made impossible, worsening for want of protective measures, or a recourse lost against a third party
Forfeiture for late notification is not automatic: it requires an express stipulation in conspicuous characters, which is satisfied here, AND a prejudice caused to the insurer by the delay. That second point is decisive and often ignored on both sides. It is not the same as good or bad faith, which is the test of an altogether different mechanism, that of disclosure of the RISK and not of the loss. The practical consequence is that two identical delays do not have the same effect: on a fire attended by the fire brigade, whose debris is still there, a month harms nobody; here, between May 19 and July 3, the site propped, made good and carried on, so that inspecting the prior condition became impossible. It is therefore not the duration that loses the file, it is what the site did during it.
Glossary entry · bonne-foi31. A contractor's all risks policy has an inception date of September 1, conditional on payment of the first premium, paid on September 12. Geotechnical boreholes were carried out from August 7 to 22 and preliminary demolition from August 18 to 29. A machine knocks over a boundary wall on September 5. Is the damage covered?
No: inception was conditional on payment of the premium, made on the 12th, and real cover starts on that date
Inception is not a date but a combination of conditions, and a condition precedent of payment shifts real inception while the contract carries no date other than September 1. It is the quietest drafting trap in the class, because it does not read where one looks for a date. The fate of the wall belongs to another discussion, that of existing property, and it does not even arise here. What to remember is the measure of the gap: the project's first physical operation is the August 7 borehole, real cover starts on September 12, the interval is thirty-six days, and it contained a demolition, that is, the most loss-prone operation of the project. That number was knowable in July, by a subtraction, and nobody computed it because the two calendars belonged to two different people.
Glossary entry · contrat-aleatoire32. A program has a 40 million euro primary defining an event as all damage arising from one cause, and a 60 million excess layer above 40, whose particular conditions use a 72-hour hours clause. A flood develops over eight days and causes 84 million of damage in three waves of 34, 29 and 21 million. What does the excess layer pay?
Nothing: its hours clause makes three losses of 34, 29 and 21 million, none of which reaches the 40 million attachment point
Each floor of a program is a separate contract, and the follow-form clause ties it to the primary only subject to its particular conditions, meaning it stops following precisely where somebody took the trouble to change something. Here the change bears on the definition of an event, which is exactly the notion that decides the amount: on a windstorm the two definitions coincide and nobody notices; on an eight-day flood they diverge, and the layer sees three losses where the primary sees one. That gap must be named for what it is. It is not an exclusion, no wording says the damage is uncovered; it is not a shortfall of capacity, the program carried 200 million. It is a discontinuity between two contracts each coherent read on its own, and only a grid cross-reading the definitions floor by floor brings it out.
Glossary entry · clause-de-suivi33. A main contractor undertakes by contract to indemnify the project owner against any consequence of damage to adjoining property, including without fault on its part, and in exchange enjoys a liability cap of 3% of the contract value. Its liability policy excludes liability assumed by contract beyond general law. Damage of 14 million euros occurs with no fault established. How do the two texts combine?
The policy follows the share corresponding to general law and not the contractual excess, and the cap protects the contractor only if a judge upholds it
Insurance covers a liability, it does not create one and does not remove one. Without fault, general-law liability toward the neighbors does exist through abnormal neighborhood disturbance, which disposes of the idea that there is nothing to cover; but the undertaking to indemnify the project owner against ANY consequence goes beyond that, and it is precisely that excess the policy excludes. The insurer rated a legal exposure defined by rules it knows, not the undertaking its insured will sign tomorrow. The second point is the one that gets missed: the 3% cap on which the contractor built its plan holds only if a judge upholds it, and it does not operate in cases of gross fault. The two protections are not independent, they lean on one another, and when the cap falls exposure becomes unlimited at the very moment cover turns out to be too short.
Glossary entry · canalisation-responsabilite34. A main contractor is liquidated on February 8; the last crews leave the site on March 2 and guarding stops on March 15 for want of a payer. The single policy restricts cover to theft, fire and natural events beyond sixty days of interruption, subject to guarding and weatherproofing being maintained. An intrusion removes 340,000 euros on May 12. What happens, and which act would have paid most?
The theft falls within the restriction whose guarding condition is unmet; the most profitable act was free, a dated record on March 2
The period runs from the physical fact, March 2, and not from the liquidation, which puts its expiry at May 1: the May 12 theft is therefore later, and restricted cover applies to it. That cover targets theft precisely, which suggests the file is saved. It is not, because the restricted cover is conditional on guarding being maintained, stopped on March 15, and the missing condition empties the cover the retained peril seemed to promise. What must then be seen is what was still possible: guarding required a budget a liquidation no longer commits, but the dated record of the state of the works when the crews left cost nothing. It would have separated what degraded during the stoppage from what was already so, and given the resumption the one reference it will lack.
Glossary entry · tous-risques-chantier-car35. In the middle of a dispute over the quality of one package, a project owner calls a performance guarantee and an advance payment guarantee, both on demand, for 12.8 million euros in total. The guarantor pays eight days later. A month afterwards, a fire destroys works in progress worth 3.2 million. What can the contractor raise, and does the 12.8 million serve to rebuild?
It can raise nothing against the guarantor, must sue for restitution, and the 12.8 million guaranteed an obligation to perform, not damage: it covers not one euro of the fire
An on-demand guarantee is paid on a simple conforming call, without the guarantor being able to raise the alleged non-performance, the dispute or even pending litigation: that is its purpose, and the reversal of bargaining power is total, the party that would have had to prove its right collecting first. Only a manifestly abusive or fraudulent call is an exception, and that must be shown within days before a judge. One must then not confuse the two families filed in the same binder: a bond guarantees an OBLIGATION, insurance indemnifies DAMAGE. The 12.8 million is therefore not a reserve available for rebuilding, and the fire comes under the policy, not the guarantees. That leaves the consequence technical departments miss: a bond consumes a credit line and the guarantor has full recourse against its principal, so a contractor debited 12.8 million in a week sees its capacity to commit collapse across all its other projects.
Glossary entry · cautionnement-surety-bond36. A grinding operation without a formal hot work permit, on a 1.8 million euro contract carried out in a producing paper mill, causes a fire: 9.7 million of damage and 6.2 million of business interruption over forty-one days of shutdown. What element commands the largest head of the file?
The missing hot work permit: business interruption is attached to covered physical damage, and formalizing the permit is a condition of cover, not good practice
The ratio of magnitudes already shows the contract value caps nothing: 1.8 million of works produced 15.9 million of consequences, and that is the signature of works on occupied sites, where what can be destroyed is essentially what already existed. Business interruption, the largest head, is covered neither by the construction policy, which does not cover it, nor by the existing property extension, which bears on physical damage: it comes under the plant's policy, which attaches it to physical damage covered by that policy. Fire is a named peril, so that door is open, and everything then turns on the one condition that is unmet. A hot work permit is not a prevention recommendation: it is a condition whose breach is sanctioned directly, and hot work is the leading cause of fire on these sites. A ten-minute document commands a sum nine times larger than the entire contract.
Glossary entry · perte-exploitation37. A German group builds in France through its French subsidiary. The master program, English law with London arbitration, carries 150 million euros and a difference in conditions clause benefiting the parent. A French local policy of 60 million is issued by a licensed insurer retroceding 95% to the program's carrier. A collapse causes 88 million of damage and three neighbors sue in France. What is wrong in how the group built its program?
The absence of ten-year liability insurance, mandatory law and not replaceable by equivalence, the subsidiary having besides a claim only against the local insurer and the arbitration clause not being enforceable against the neighbors
Fronting is legitimate and universally practiced, and a French policy can perfectly well sit under an English-law program: both of those answers describe regular practices. What is not regular comes down to three points the program chart does not show. Ten-year liability insurance is mandatory law for the works it targets, and no foreign program substitutes for it by equivalence: that is the gravest and simplest breach. Next, fronting separates the name from the money, so the French subsidiary has a claim only against the local insurer up to 60 million, the balance coming under a difference in conditions clause operating at master program level, therefore for the parent's benefit and not the entity suffering the damage. Finally the neighbors signed no contract: a contract chooses its law, it does not choose the law of those who did not sign it.
Glossary entry · fronting38. A flood causes 24.7 million euros of damage on a policy limited to 25 million. The project owner also commits 1.4 million of pumping and cofferdams to stop a second wave, 900,000 euros of temporary anchors on a threatening slope, 2.2 million of permanent support, and 3.1 million of night work to claw back the delay. The second wave happens anyway. What does the insurer owe on those four expenses?
2.3 million beyond the sum insured: the pumping and the anchors are mitigation costs, the permanent support is repair and the night work acceleration
Expenses incurred to prevent or mitigate the consequences of a covered loss are owed beyond the sum insured, and that is mandatory law: on a limit already consumed to 24.7, that rule is worth more than the last slice everybody negotiated. Classification still has to be done. The pumping and the anchors aimed to stop the worsening: they are mitigation, and the second wave happening anyway does not declassify them, since the measure had to be reasonable, not victorious. The permanent support is a repair, even ordered from the same firm on the same invoice, and that is exactly the trap the separation requested in the purchase order would have avoided. The night work is not mitigation: the damage had stopped, its economic consequences were being clawed back. The direction of time settles almost every doubtful case: mitigation stops the damage from growing, acceleration repairs what it has already cost.
Glossary entry · principe-indemnitaire39. Eight months after an 11 million euro loss, the insurer offers 7.4 million in full settlement. It re-requested in July documents already supplied in April, then in September invoked an exclusion the April expert report already discussed. A share of 4.3 million has never been disputed. The idle site costs the insured 300,000 euros a month. What should be done first?
Serve a formal demand and apply for an interim payment on the 4.3 million not seriously disputable, removing the asymmetry of time without deciding anything on the exclusion
Eight months at 300,000 euros makes 2.4 million, against the 3.6 million the settlement gives up: the cost of time is two thirds of the concession being asked for, and it is carried by one party alone. That is what makes acceptable in November an offer that would have been refused in May, with nothing in the file having changed. Accepting therefore means paying for the asymmetry, and waiting means financing it. Suing on the merits for the whole is a heavy, slow move that lets the same meter run. The two useful levers are procedural and are taken early: a formal demand puts a cost on passing time by starting interest, and an interim payment in summary proceedings frees the share the argument over the rest holds hostage. They are not primarily about collecting: they remove the parameter that underpinned the offer, and they do so without deciding anything on the design defect.
Glossary entry · bonne-foi40. A tank cracks on its first fill. The 2021 calculation note assumes 15 millimeters of settlement where feedback published in 2020 on comparable ground recommended 25. Separately three weld passes are outside procedure, and the plate delivered conforms to the order but is of the lowest permitted grade. The policy excludes design defect. What, among those three facts, escapes the exclusion?
The out-of-procedure passes, which are a workmanship defect: a clause excluding design says nothing about workmanship
Three categories are distinguished and wordings treat them differently: design defect bears on what was specified, workmanship defect on carrying out correct specifications, material defect on the material itself. The out-of-procedure passes fall in the second, which this clause does not exclude, and that is the point most favorable to the insured and least often raised. The two distractors that look technical are wrong for opposite reasons. The state of the art is assessed at the date of design and not by the age of the file: here the 2020 warning precedes the 2021 note, so it works against the designer. And the plate is not a non-conformity since it conforms to the order: the narrow margin it left is a design choice, so it attaches to the first category. What will remain is saying in what proportion each cause operated, which cannot be measured and will be negotiated on the material preserved in the first days.
Glossary entry · vice-propre41. A pipe fails at an out-of-procedure weld run. The run is worth 400 euros, the technically replaceable section 62,000, the whole line requiring requalification 840,000. The sprayed fluid damages neighboring equipment for 4.3 million. The policy excludes the defective part and covers consequential damage, without defining the defective part. What position is it in the insured's interest to argue?
The replaceable section, a defensible reading matching what the invoice will show, the run-only reading undermining the credibility of the quantification
The effect of the delimitation is mechanical, and it runs opposite to what a wide reading suggests: consequential damage is defined by subtraction, so the wider the defective part, the smaller it gets. The insured does have an interest in the narrow reading, but the narrowest is not the most defensible. Nobody replaces an isolated run, and arguing that the defective part is worth four hundred euros undermines the credibility of the whole quantification at the very moment it matters. The repair test, taking the smallest technically replaceable set, has the advantage of matching what the invoice will show. The insurer will argue the functional test relying on requalification of the line, and the answer lies in a factual distinction to be documented from the start of the repair: is the whole-system test imposed by replacing the section, or by a safety requirement that would have applied anyway.
Glossary entry · dommage-materiel-direct42. A slope designed at 1 in 1.5 where the ground called for 1 in 2 collapses during a thirty-year rainfall event. A counterfactual calculation shows a correct slope would have withstood that event, with a small margin. The policy excludes damage caused directly or indirectly by a design defect. What element decides the file?
The words directly or indirectly, which make a contribution sufficient: the counterfactual establishing the causal role, the exclusion carries everything
Two reflexes must be set aside. The first is believing an established defect suffices: the insurer must show two distinct things, the defect AND its causal role, and a badly designed structure that collapses for a reason unrelated to its defect remains covered. The second is pleading the thirty-year rainfall as an external cause: the counterfactual says a correct slope would have held, so without the defect the damage would not have occurred, and the causal role is established. What then decides is the wording. The words directly or indirectly read like boilerplate and are exactly the opposite: they make a contribution sufficient, without the defect having to be the determining cause. A wording adopting the determining cause would reopen the argument, and a sharing clause would have a percentage negotiated. Three wordings, three outcomes, on identical facts. As for the small margin, it would have helped in the reverse configuration, where the correct slope would not have held either.
Glossary entry · clause-exclusion43. After a settled failure, expert examination establishes that the faulty welding procedure served for forty-two identical branch connections, all intact. Radiographic testing would cost 180,000 euros. The policy excludes the defective part, covers consequential damage, and carries a series clause grouping into one loss damage arising from one cause. What can the project owner obtain, and on what basis?
Nothing a priori, forty-two intact items not being damage; but if radiography reveals initiated cracks, those are damage and the search costs attach to them
Property insurance indemnifies damage, and forty-two intact items are not damage: the request as spontaneously framed will rightly be refused. Invoking the series clause is useless and that is the confusion to avoid, since that clause counts actual losses where here nothing has happened to the items. But the door is not closed, and two qualifications exist. An unfailed item may already be damaged, an initiated crack being damage even when invisible, and search costs leading to it attach to it: the testing then funds itself through its result. Mitigation for its part requires real and not conjectural imminence, which a doubtful procedure does not establish on its own. That said, the decision is not taken on that calculation: 180,000 euros is compared with what a second failure would cost, and with the position of an insured that knew and did nothing.
Glossary entry · sinistralite-attritionnelle44. A 180-kilometer pipeline is insured on a 60 million euro limit, with a 250,000 euro deductible per loss and a clause defining a loss as all damage occurring in one place and arising from one cause. A storm damages, over two days, nine work zones 4 to 60 kilometers apart, for 3.1 million in total: three zones at 180,000 euros each, and six zones sharing 2.56 million. What does the insurer pay?
1.06 million: nine distinct places make nine losses, the three zones at 180,000 euros staying below the deductible and yielding nothing
The clause requires TWO conditions, one place and one cause, and the storm supplies only one. Nine zones 4 to 60 kilometers apart are not one place, so there are nine losses and not one. The count needs care: the three zones at 180,000 euros stay below the deductible and yield nothing, without a full deductible being chargeable to them; that leaves six zones carrying 2.56 million, of which 1.5 million is deductibles, so 1.06 million. What must be seen is that the 60 million limit played no part: a properly sized program pays almost nothing, and the whole mechanism lies in the definition of a loss, a line nobody negotiates because it carries no large figure. That is the peculiarity of linear works: dispersion protects against the local peril but not the extended one, and a two-hundred-kilometer route is far more likely than a point to cross a dangerous zone.
Glossary entry · pml45. An industrial complex is accepted with 640 reservations, one bearing the entry 'roof finishing defects, to be made good'. The project owner was assisted by a design supervisor and an inspection body. Twenty-two months later, water ingress costs 1.4 million euros; expert examination establishes a defective waterproofing upstand visible from the roof on the day of acceptance. Where does the problem lie?
In the wording of the reservation: describing neither a fact nor a place, it reserves nothing, and acceptance purges an apparent defect
A vague reservation reserves nothing: its function is to allow knowing what is reserved and establishing that it is cleared, and a formula stating neither an observed fact nor a place allows neither. The defect was visible from the roof, therefore apparent, and acceptance purges unreserved apparent defects. The number of reservations changes nothing, acceptance with reservations being full acceptance whatever the length of the list. The paradox worsening the project owner's position here must be added: assisted by a design supervisor and an inspection body, it is deemed to have had to see more, and apparent is assessed all the more widely because it was better advised.
Glossary entry · assurance-construction46. A project insured on 30 million euros per loss, with a 45 million aggregate and automatic reinstatement against additional premium, suffers a collapse settled at 21 million in May. It resumes in September with nine months of works remaining, the policy expiring in five months. What is the most urgent decision, and why is it the least visible?
Establish what remains on the aggregate, 24 million and not 30, and decide whether the paid reinstatement is needed: the May settlement was seen as a success, so nobody asks
A settlement consumes the aggregate as much as the per-loss limit, and that is the opposite of the reassuring intuition following a well-settled loss: 24 million remains for nine months of works, not 30, and reinstatement exists but is paid for. The extension is real and important, but it is not the most urgent and above all its right moment has passed: it was to be asked in May, while the settlement was being discussed and the two subjects could be handled together; asked in September it becomes an isolated negotiation on a risk that has just cost 21 million. As for the deductible, it is not recalculated mid-contract. The common thread is that the heaviest decision is the one no document in the file makes visible.
Glossary entry · reconstitution-garantie47. On a public contract, an authority notifies a service order requiring a change the contractor considers unsuitable; it complies without issuing a written reservation. Later, unforeseen physical conditions require 1.8 million euros of unplanned dewatering. Whom must the contractor approach on each of those two points?
Nobody for the service order, the absence of a written reservation within the period amounting to acceptance; the public entity for the unforeseen conditions, which are excess performance costs and not damage
Two regimes cross and claiming from the wrong debtor wastes time limits. A service order is complied with even when contested, and the objection is made afterwards, by WRITTEN reservation within a strict period: unlike the notification periods studied elsewhere, this one requires no prejudice to be shown, and a verbal objection does not suffice. The effect is therefore already produced. Unforeseen physical conditions, by contrast, come under a mechanism peculiar to public contracts, compensating an upset in the contract's economy: they are excess performance costs, not physical damage, and no policy has anything to do with them. Asking an insurer for them would be the costliest mistake, and seeing a design defect in them does not change their nature: nothing is damaged.
Glossary entry · backstop-public48. Commissioning is planned for April 1, 2025 and occurs on August 20, 2026, that is 506 days, including two months of delay already accrued before the loss. Delay cover carries a 45-day deductible and a 12-month indemnity period. The business plan assumes 28,000 euros of daily margin, the actual margin observed at start-up is 22,000. What does the insurer owe?
7.04 million: the period runs from April 1, 2025, a fixed date, so 365 days less the 45-day deductible, at the actual 22,000 margin
Three durations get confused and must be laid out in order. The observed slippage is 506 days, of which two months were accrued before the loss: roughly 445 are attributable to it, and the deductible cuts 45, which would leave 400. But the indemnity period does not cap that share: it runs from the PLANNED commissioning date, April 1, 2025, a fixed date that neither the loss, nor the end of repairs, nor a pre-existing delay shifts. It therefore closes on April 1, 2026, and the indemnifiable share is 365 days less 45, that is 320. Finally comes the margin: the business plan is a computation ceiling and not an acquired right, and the indemnity principle imposes the actual margin. 320 times 22,000 makes 7.04 million. The file's costliest parameter is therefore neither the deductible nor the margin, it is a duration chosen at placement.
Glossary entry · perte-exploitation-anticipee-alop49. A non-recourse financed project has a loan agreement naming the security agent as loss payee, with mandatory debt prepayment above 25 million euros of loss or if reconstruction cannot be completed in twenty-four months. A fire causes 31 million of damage, reconstruction estimated at thirty months. What becomes of the indemnity, and what do the shareholders lose?
It repays the debt instead of rebuilding, both conditions being met when one sufficed: the project stops and the shareholders lose their equity, with no cover having been declined
On non-recourse financing, lenders have only the works as security, and being named loss payee is no mere information formality: it moves the recipient of the settlement without changing a word of the cover, so the project owner is no longer the one deciding how the indemnity is used. Here both prepayment conditions are met, the amount and the reconstruction period, when one would have sufficed. The money therefore repays the debt, the project stops, and the shareholders lose their equity even though the insurance worked perfectly: it is the structure that produces that result, not a declinature. It must also be seen that the loan agreement caps no indemnity, it organizes its allocation, which is an altogether different thing.
Glossary entry · lignes-financieres50. A unit must reach 940 tonnes per day. In March, during commissioning testing, an overpressure damages an exchanger, repaired and paid by the policy. In September, the performance test measures 880 tonnes per day. The project owner claims from its insurer both the production shortfall and the resulting six months of slippage. What can it obtain?
Neither a priori: underproducing is a contractual non-performance and not damage, and the slippage arises from the test failure, not from physical damage
Three tiers hide under the word testing, and mixing them means claiming from the wrong debtor. The March damage came under the policy and was settled: that point is closed. The 6.4% shortfall measured in September is of another nature, nothing being broken: the installation works and produces less than promised, which is a contractual non-performance whose compensation lies in the supply contract's performance damages. And the slippage arises not from the March damage but from the September test failure: delay cover requires physical damage at the origin of the postponement, and underperformance is not damage. That leaves the gray zone, and it is the only route open: if the repaired exchanger has not recovered its characteristics, the shortfall has a covered material cause. Nothing is presumed here, the demonstration requires comparing measurements from before and after the damage.
Glossary entry · perte-exploitation51. A risk engineering report recommends three measures on outdoor storage; the contract stipulates that the insured undertakes to implement the recommendations of risk engineering reports. The site performs the first, says nothing about the other two, then triples its deliveries in July in a configuration the report had not contemplated. A fire occurs in September. How are the two failings argued?
Separately: the undertaking clause turned the recommendations into conditions, so the two unperformed points are one thing; the July tripling is a new fact coming under aggravation of the risk
The central mechanism is the contract's cross-reference to the report, and it is discreet: by undertaking to implement the recommendations, the insured turned the whole document into contractual obligations, including sentences drafted as suggestions. Without that clause the report would have remained a technical opinion and the reasoning would differ, which shows the answer depends on one line of the contract and not on the nature of the document. The two unperformed points are therefore conditions, and the May silence does not cover them: a written reply, even refusing while explaining why, would have opened an argument instead of leaving a point unaddressed. The July tripling is something else: the April report did not contemplate it, so it is not a failure to perform but a new fact, with the distinct regime of aggravation of the risk. Mixing them loses the arguments of one among those of the other.
Glossary entry · tarification-exposition52. A sorting center is accepted on May 14, 2019. In March 2023, cracks appear in the industrial floor slab: the works stand perfectly, soundness is in no way in question, but vibration makes calibrating the sorting machines impossible. Under which statutory warranty does this defect fall?
The ten-year warranty, through the unfitness-for-purpose test, wider than the soundness test, with the presumption of liability that accompanies it
The ten-year regime does not require soundness to be affected: it is enough that the defect renders the works unfit for their purpose, and that second test is wider than the first. Vibration preventing calibration of the machines prevents the building's very use, which is exactly unfitness for purpose, and it is by that route that apparently minor defects enter the most protective regime. The other routes close for distinct reasons: a slab poured on the structure is not a separable item, the making-good obligation lasts one year without renewing, and concluding that no warranty operates means confusing the two ten-year tests. The practical consequence is considerable: once classification is established, liability is presumed, and the project owner has no fault to show.
Glossary entry · assurance-construction53. A hired mobile crane overturns. The crane is destroyed (1.7 million euros, new value placed on the hirer by the hire contract), a span being poured is crushed (2.4 million), and a severed power line cuts a district's supply (380,000 euros of repair, 1.1 million claimed for the service interruption). How do these three losses divide?
Three contracts for one second: the plant policy for the crane, the construction policy for the span, liability cover for the line and the interruption
A construction policy insures the works and expressly excludes equipment belonging to the insureds or made available to them: the crane is therefore outside it, whatever its usefulness to the execution, and comes under a separate plant policy. The span is the works and settles without difficulty. Third parties come under a third contract. One second therefore produced three losses under three regimes, and it is the configuration where the absence of one of the three shows immediately. Two points are then missed. The exposure on the crane comes not from an insurance choice but from the hire contract, which places new value on the hirer. And the service interruption suffered by subscribers with nothing physically damaged is non-consequential financial loss, almost always sub-limited, on the line nobody looks at because it carries no large figure.
Glossary entry · dommage-materiel-direct54. In the tenth month of a project, a storm destroys 9 million euros of works already erected on the project owner's land. The contract is an ordinary works contract, with no departure from the burden of risk, and acceptance has not occurred. Who bears that loss, and why does the answer surprise?
The contractor, which must rebuild to be paid: ownership and burden of risk are two distinct notions, and the owner owns ruins somebody else must raise
Two questions taken for one must be separated. Ownership says who holds: by accession, the project owner owns the works as they are incorporated, with no deed, no acceptance and sometimes no payment. The burden of risk says who loses if the thing perishes through nobody's fault, and in an ordinary works contract the contractor is bound to deliver completed works: it must therefore rebuild to be paid, even with no fault at all on its part. The surprise comes from the overlay: the owner owns ruins somebody else must raise. The insurance consequence, which is the real subject, must be seen: insurable interest moves while one builds, and the insured with an interest in the cover before acceptance is not the owner.
Glossary entry · principe-indemnitaire55. A warehouse is completed in early September. The project owner takes possession on the 8th, installs racking and stores goods; the balance is paid on the 15th. The acceptance minute is signed on October 6 with effect from that date, and the operating policy attaches on October 1. A fire destroys the building on September 22. Where is the exposure?
In the interval a tacit acceptance opens: possession, operation and payment of the balance characterize it in September, yet the operating policy attaches only on October 1
The regimes follow the date of acceptance, not that of the minute's signature, and taking possession, operating and paying the balance are exactly the indicia of tacit acceptance. If it is set at September 8 or 15, the construction policy ceased then and the operating policy starts only on October 1: the fire on the 22nd falls in an interval where the works are no longer a site and not yet an insured asset. Two beliefs sustain that exposure. The first is that the maintenance period would extend the construction policy: it does not, it covers, depending on its form, what the contractor breaks on returning or what arises from the execution. The second is that attachment could relate back, which no policy does for a loss already suffered. That day four regimes change state, and none of the four switches was decided: they occurred when somebody installed racking.
Glossary entry · garantie-subsequente56. On a fleet of eighty identical storage containers, the thirtieth installed suffers a thermal runaway (1.9 million euros) attributable to a sensor common to the whole series. Twenty-nine are installed and intact, fifty are undelivered. The supply contract caps the supplier's liability at 11.4 million. What should govern the decision to suspend deliveries?
The supplier's cap, worth about six containers: beyond it there is neither insurance on intact items nor useful recourse
A series defect creates three populations, and mixing them means reasoning on the wrong contract. The twenty-nine installed are intact, so they are not damage and their testing is not covered a priori. The fifty undelivered are not an insurance matter at all: one can still refuse to take them, and that is a supply question. What remains is what really caps the exposure, and it is neither the policy limit nor the series clause, which count actual losses: it is the supplier's liability cap, expressed as a percentage of the order price and therefore computed before anyone knew of the defect. Eleven million four hundred thousand over 1.9 million per container is about six containers. Beyond that the recourse no longer serves, and it is that boundary which should govern the decision to suspend.
Glossary entry · sinistralite-attritionnelle57. Six turbines carry a 96% availability guarantee over fifteen years, at 45,000 euros per missing point per turbine per year, capped in aggregate at 8.6 million euros. Measured availability is 91% in the first year and 92% in the second, and the supplier pays. What do those two years say about the rest of the contract?
That 2.43 million is already consumed, more than a quarter of the cap in two years out of fifteen: a performance guarantee cap is spent and does not reinstate
The calculation comes before any reasoning: five missing points in the first year and four in the second make nine points, multiplied by six turbines and by 45,000 euros, that is 2.43 million. The 8.6 million cap is therefore not reached, which disposes of immediate exhaustion, but more than a quarter has gone in two years out of fifteen, and at that rate only five or six years of protection remain. That is the feature distinguishing these guarantees from insurance and which goes unseen: a performance guarantee cap is an asset that IS SPENT, where an insurance limit reinstates or is renegotiated each year. As for withdrawal after loss-making years, it confuses a contractual guarantee, whose debtor knows its content and bears no fortuity, with an insurance contract that can be cancelled.
Glossary entry · principe-indemnitaire58. A complex is accepted in three sections: warehouse on March 3, 2024, offices on July 12, 2024, docks on January 9, 2025, with twenty-four months of maintenance per section. In April 2026, localized settlement of the warehouse slab appears, with no harm to the structure and no hindrance to operations. What does this defect find?
Nothing: warehouse maintenance expired on March 3, 2026, and the statutory warranties do not take over, for want of harm to soundness or use and of a separable item
Each section carries its own period, and the three dates must be laid out before looking at the defect: the warehouse expired on March 3, 2026, the offices expire in July 2026, the docks in January 2027. In April 2026 the works are therefore partly inside and partly outside, and the warehouse has been outside for six weeks. What takes over does not cover the same thing: the proper-functioning warranty targets separable items only, and a slab poured on the structure is not one; the ten-year warranty requires harm to soundness or use, which localized settlement with no hindrance to operations does not establish. The defect falls exactly into the space neither maintenance nor the statutory warranties cover. One detail completes the file: the warehouse retention was released in March, so the only concrete lever to bring the contractor back disappeared six weeks before it was needed.
Glossary entry · garantie-subsequente59. After a 6.4 million euro settlement, of which 1.1 million stayed with the project owner between deductible and amounts above a sub-limit, the responsible subcontractor, not an insured under the project contract, offers a 500,000 euro settlement against abandonment of all claims. The project owner, already indemnified, sees a good deal. What does it risk?
Repaying part of its indemnity for having extinguished its subrogated insurer's recourse, and losing its share of the sums that would have been recovered
The project owner's reasoning rests on a mistake about ownership: by paying, the insurer was subrogated into its rights, and the claim against the subcontractor no longer belongs to it. Signing a settlement extinguishing all claims therefore means disposing of another's property, and the obligation to preserve the recourse, written into every policy and read in almost none, is sanctioned by repayment of what was paid, to the extent of the prejudice caused. One must then see what it abandons without knowing: it bore 1.1 million between deductible and excess, and that share comes back to it out of recoveries, under a sharing rule deciding whether it is served before the insurer's, after, or pro rata. The settlement therefore deprives it both of that share and of the peace it sought, since its insurer will pursue anyway.
Glossary entry · subrogation60. A refining unit is to start up on March 1, 2028. The advanced loss of profits cover carries a daily amount of 48,000 euros, a 30-day deductible and a twelve-month indemnity period. The suppliers' extension is capped at 3 million euros and at 45 days. A compressor is destroyed in the maker's works, before title passes, and its replacement pushes start-up back by 160 days. A customs dispute then adds 28 days. What does the cover pay?
720,000 euros, that is fifteen days: the extension's cap in days stops the count at 45 and the deductible removes 30
The two delays must be sorted before counting, because they are not of the same nature. The 28 days of customs dispute arise from no material damage and fall wholly outside the cover: adding them to the count asks a damage-triggered cover to answer for an event containing none. The compressor's 160 days do arise from damage, but from damage occurring at the maker's on a thing that did not yet belong to the project, and they are therefore seen only by the suppliers' extension. That extension carries two limits of different natures, and that is what the calculation must settle: the cap in days stops the count at 45, the 30-day deductible is then set against it, and fifteen days at 48,000 euros remain. The 3 million money cap goes very largely unused, which is the ordinary situation on a long loss with a moderate daily cost: reading only the money limit would have led to the conclusion that the extension was generous.
Glossary entry · perte-exploitation-anticipee-alop61. An excavation is flooded by run-off after a twelve-year return period storm. A dewatering condition required four pumps; three were running. The project establishes that the missing capacity, measured against the actual inflow, would have changed water depth by 5.8 cm out of 3.10 m, and that the reinforcement would have been fouled identically. The insurer relies on the condition. What is that calculation worth?
Nothing against a condition made a precondition to cover, whose purpose is precisely to dispense with establishing a link; it becomes central again only if the clause is an ordinary obligation
The calculation is right and it is not enough, which is what makes this file instructive. A condition whose performance is made a precondition to cover produces an effect that does not depend on causation: that is exactly why it is drafted that way, and it is what separates it from an ordinary obligation, whose breach is sanctioned only to the extent of its consequences. Faced with such a clause, showing that the breach changed nothing does not restore the cover, however regrettable that seems. The same calculation, faced with an ordinary obligation, becomes on the contrary the central argument and makes the claim stand. The outcome of the file was therefore decided the day the clause was drafted, well before it rained, and it is the reading of that drafting that must come first. As for the return period, it bears on another question, whether the event went beyond what a careful site had to absorb, and it does not answer the one asked here.
Glossary entry · clause-exclusion62. A masonry building next to an excavation cracks. Monitoring, on targets ten metres apart, never exceeded 9 mm of absolute settlement against a stop threshold set at 15 mm, and the site was not halted. An expert then records, at the boundary between two foundation types, a difference of 8 mm over 2.40 m. The project owner argues it crossed no threshold. What is that defence worth?
It is worth nothing against the neighbour: 8 mm over 2.40 m gives a distortion of 1/300, well beyond what cracks masonry, and abnormal disturbance imposes liability with no fault to be shown
Two errors overlap here and must be undone one after the other. The first concerns the quantity measured: a building descending as one block does not crack, and what cracks is the difference in settlement measured against the distance over which it occurs. Eight millimetres over 2.40 metres gives 1/300, when masonry commonly suffers well before that order of magnitude. The dashboard therefore showed green on a quantity that does not damage, while the works were well beyond on the one that does, and targets ten metres apart could not in any case see a step expressing itself over 2.40 metres. The second error concerns the basis of the claim: abnormal neighbourhood disturbance imposes liability without fault, so that working well protects against an allegation of negligence but not against a claim founded on the abnormality of the disturbance. As for the prior record, its absence reverses nothing: it deprives the project owner of the only means of showing what pre-existed, and makes apportionment impossible to establish.
Glossary entry · responsabilite-sans-faute63. An industrial complex is being built on a cyclone coast. Value in place at the opening of the season is 30 million euros in the first year, 110 million in the second and 190 million in the third, the last being the final value. The prevention engineer takes a destroyed share for the reference event of 15% at foundations, 55% with the frame up and the envelope open, and 10% once the envelope is closed. The second season finds the envelope open, the third finds it closed. Which season carries the heaviest exposure?
The second, at 60.5 million euros against 19.0 million in the third, when only 58% of the value is in place there
The calculation is three multiplications and its result contradicts intuition. The first season exposes 30 million at 15%, that is 4.5 million; the second 110 million at 55%, that is 60.5 million; the third 190 million at 10%, that is 19.0 million. The peak therefore falls in mid-programme, and it is worth more than three times the last season, even though installed value there is 80 million lower. What is at stake is not value in place but its product with the share an event would destroy, and those two curves do not have the same shape: the first only rises, the second rises then falls as the works acquire the protections they were designed for. Following value in place while believing one follows exposure therefore leads to reassurance exactly in the period when concern is due. The practical consequence is that this peak is moved by calendar decisions, taken in progress meetings.
Glossary entry · pml