Family of policies covering risks specific to construction and erection phases, as well as ten-year builder's warranty and property damage cover.
Construction insurance encompasses several specialized policies that cover risks associated with building and civil engineering projects during and after the construction phase. The Contractor's All Risks (CAR) policy covers physical damage to works in progress, materials and site equipment, as well as the contractor's civil liability toward third parties. The Erection All Risks (EAR) policy is its equivalent for industrial plant, machinery and equipment installation projects. These policies are subscribed for the duration of the project. Beyond the construction phase, French law imposes two specific warranties. The ten-year builder's warranty (garantie décennale), subscribed by constructors, covers for ten years defects and workmanship failures that compromise the structural integrity of the work or render it unfit for purpose. The dommages-ouvrage (DO) insurance, compulsorily subscribed by the project owner under the Spinetta Act of 1978, provides pre-financing cover that allows the insured to obtain rapid compensation without waiting for liability to be established, with the insurer subsequently exercising recourse against the constructors by subrogation. The project owner's own liability may also be covered by a specific liability policy.
A property developer builds an office building in Paris. They subscribe a Contractor's All Risks policy for 36 months of construction and compulsory dommages-ouvrage insurance. Six years after handover, structural cracks appear. The DO insurer compensates the developer within three months, then exercises recourse under the ten-year builder's warranty against the main contractor.
CAR, EAR, Contractor's All Risks, Erection All Risks, tous risques chantier, dommages-ouvrage, garantie décennale