Mandatory construction defects insurance (assurance dommage ouvrage): a complete guide for project owners and private individuals

Your construction project is moving forward and you discover the existence of construction defects insurance (assurance dommage ouvrage), often presented as a complex and costly obligation. This insurance, introduced by the Spinetta Law of 1978, is nonetheless an essential safety net for any project owner, whether a private individual building a main residence or a professional developing a property programme. Poorly understood, it can generate significant penalties and leave the owner without recourse in the face of construction defects. This article details the legal obligations, practical cases of application, the penalties for failing to take out cover and the strategies to optimise this indispensable cover.

The legal framework of construction defects insurance

The legal obligation under Article L. 242-1 of the French Insurance Code

Article L. 242-1 of the French Insurance Code imposes a clear obligation: "Any individual or legal entity who, acting as owner of the works, seller or agent of the owner of the works, has construction works carried out, must take out before the opening of the site, on its own behalf or on behalf of successive owners, insurance guaranteeing, irrespective of any determination of liability, payment of the full cost of the works to repair the damage" of the kind for which builders are liable.

This wording covers a broad range of situations. A private individual having a detached house built falls under this obligation, in the same way as the property developer developing a collective housing programme. The obligation also applies to agents acting on behalf of the owner, such as a property manager handling major renovation works on behalf of co-owners.

Interaction with the builders' ten-year liability

Construction defects insurance interacts with the ten-year liability of builders, codified in Article 1792 of the French Civil Code. That article provides that "any builder of a work is liable as of right, towards the owner or purchaser of the work, for damage, even resulting from a defect in the ground, which compromises the solidity of the work".

The ten-year guarantee covers damage compromising the solidity of the work or rendering it unfit for its purpose for ten years from acceptance of the works (réception). Construction defects insurance makes it possible to obtain rapid compensation for that same damage, without waiting for the often lengthy outcome of liability actions against the builders. The distinction between this guarantee, the two-year guarantee and the guarantee of perfect completion is detailed in our article on the choice of guarantee according to the defect.

Scope of application: who must take out this insurance?

Persons subject to the obligation

The obligation to take out construction defects insurance falls on three categories of persons clearly identified by the law:

The owner of the work is the primary debtor of this obligation. This is the person who owns the land at the time the works are undertaken and who retains legal control over them. A private individual having a main residence built falls into this category, as does a société civile immobilière (SCI, a French property holding company) developing an investment building.

The seller of a completed work or a work under construction must also take out this insurance. This typically concerns property developers who market housing off plan (vente en l'état futur d'achèvement, VEFA). The obligation persists even if the sale takes place before completion of the works, the seller retaining the status of project owner until delivery.

The agent of the owner completes this triad. This status covers professionals acting on behalf of and at the expense of the owner in running the construction operation. A property manager conducting facade renovation works on behalf of a co-ownership (copropriété), or an architect or project manager (maître d'œuvre) who has been given a mandate to manage a construction operation in full, may find themselves in this situation.

Special cases and practical exceptions

Certain situations deserve specific analysis. A tenant carrying out improvement works in commercial premises with the owner's consent is generally not subject to the obligation, unless he or she acts as agent of the owner under a precise written mandate.

The obligation applies neither to legal entities governed by public law, nor to legal entities carrying on an activity whose scale exceeds the thresholds mentioned in Article L. 111-6 of the French Insurance Code, where those entities have construction works carried out on their own account for a use other than housing (Article L. 242-1, paragraph 2). The State, when building on its own account, is subject to no insurance obligation (Article L. 243-1). A département building a secondary school or a municipality building a village hall is therefore not required to take out construction defects insurance.

Works concerned and exclusions

The obligation covers construction works in the broad sense, including new buildings, extensions, additional storeys and major renovation works altering the structure of the work. A 30 m² extension to a detached house triggers the obligation, in the same way as the raising of an existing building.

Routine maintenance, decoration or simple restoration works fall outside the obligation. Replacing a roof like for like, without altering the roof frame, does not require construction defects insurance. By contrast, the complete transformation of a roof with a change of pitch and materials may fall within the scope of the obligation.

Types of damage covered by the insurance

Damage falling under the ten-year guarantee

Construction defects insurance covers the same damage as that referred to by the builders' ten-year guarantee, codified in Article 1792 of the French Civil Code. This cover extends to "damage, even resulting from a defect in the ground, which compromises the solidity of the work" or renders it unfit for its purpose.

Damage compromising solidity includes through-cracks in load-bearing walls, subsidence of foundations, roof frame defects threatening the stability of the roof, and major waterproofing defects causing structural leaks. By their seriousness, these defects threaten the durability of the work and justify immediate cover.

Damage rendering the work unfit for its purpose is the second family of guarantees. A faulty heating system in a dwelling, an electrical installation that does not comply with safety standards, or waterproofing defects preventing normal use of the premises fall into this category. Unfitness for purpose is assessed by reference to the use intended when the work was designed.

Inseparable items of equipment

Article 1792-2 of the French Civil Code extends the ten-year guarantee to "items of equipment forming an inseparable part of the roads and utilities, foundations, framework, and external walls and roofing". This extension covers equipment integrated into the structure of the work and whose failure affects the solidity or purpose of the building.

Pipes embedded in walls or slabs, ventilation systems integrated into the structure, collective heating equipment and main electrical installations fall into this category. A defect in an embedded pipe causing leaks into the structure will be covered by construction defects insurance.

Exclusions and limits of cover

Certain damage falls outside the cover of construction defects insurance. Defects affecting separable items of equipment, covered by the good-working-order guarantee for two years under Article 1792-3 of the French Civil Code, do not fall under this insurance. Household appliances, roller shutters and individual air-conditioning equipment are typical examples of exclusions.

Damage resulting from normal wear and tear, lack of maintenance or abnormal use of the work is not covered. An owner who neglects the maintenance of his or her roof and suffers leaks due to that neglect will not be able to claim under the construction defects insurance. Likewise, damage caused by an external event (natural disaster, fire, vandalism) falls under other insurance regimes.

Subscription procedure and implementation

Timing of subscription

The construction defects insurance must be taken out before the opening of the site, generally marked by the start of excavation or demolition works. This rule aims to guarantee cover from the first acts of construction and to prevent attempts at after-the-event subscription once defects have arisen.

The insurer generally requires the complete construction file: building permit, architectural plans, detailed technical specification, list of the contractors working on the site. This prior analysis makes it possible to assess the risks and to set the terms of cover. An incomplete file, or one presenting particular technical risks, may lead to a refusal of cover or to the application of specific exclusions.

Factors determining pricing

The cost of construction defects insurance varies according to several objectively assessable criteria. The nature of the works is the first factor: a new building generally presents fewer risks than a major renovation of an old building. Architectural complexity, innovative construction techniques and geographical location (seismic zones, difficult ground) also influence pricing.

The experience and financial strength of the contractors involved weigh in the risk assessment. A project owner using recognised contractors, with solid ten-year insurance and convincing technical references, will generally benefit from more favourable terms. The presence of an experienced project manager (maître d'œuvre) and a technical inspection body may also work in the policyholder's favour.

Declaration and handling of claims

In the event of a loss liable to trigger the guarantees of the policy, the insured is required to declare it to the insurer, in writing against a receipt or by registered letter or registered electronic mail with acknowledgement of receipt. The standard clauses in Annex II to Article A. 243-1 of the French Insurance Code do not set a declaration period expressed in days; the declaration must be made during the guarantee period, which ends ten years after acceptance of the works. It is deemed complete when it states the policy number, the name of the owner, the address of the building, the date of acceptance or, failing that, of first occupation of the premises, as well as the date of appearance, the description and the location of the damage. The insurer has ten days to indicate that it is not complete and to request the missing information.

The insurer then appoints a technical expert to assess the reality of the defects, whether they fall within the ten-year guarantee and the cost of the necessary repairs. This adversarial expert examination generally involves the insured, the potentially liable contractors and their respective insurers. The expert's conclusions form the basis of the compensation decision and determine the terms of repair. On the time limits imposed on the insurer to give its position and the sanction for its silence, see our analysis of the mobilisation of the construction defects guarantee.

The strength of construction defects insurance lies in its pre-financing mechanism: the insurer guarantees, irrespective of any determination of liability, payment of the repair works, then exercises its recourse against the liable builders and their insurers. Article L. 242-1 requires it to notify its decision on the principle of cover within sixty days and to present an offer of compensation within ninety days from receipt of the claim declaration; compensation that has been accepted is paid within fifteen days.

Penalties for failing to take out insurance

Criminal and administrative penalties

Failure to take out construction defects insurance exposes the project owner to the criminal penalties provided for by Article L. 243-3 of the French Insurance Code. This offence, classified as a délit (misdemeanour), is punishable by six months' imprisonment and a fine of €75,000, or by only one of these two penalties, for individuals. Legal entities face a fine of €375,000, five times the amount provided for individuals. These penalties do not apply to an individual building a dwelling to occupy it personally or to have it occupied by his or her spouse, ascendants, descendants or those of his or her spouse.

These penalties apply from the opening of the site without valid insurance. The initiation of proceedings does not require any damage to have occurred: the mere finding of the absence of insurance is enough to establish the offence. State services (departmental directorates of territories, tax services) have powers of inspection and may record these breaches during administrative checks.

Civil and financial consequences

Beyond criminal penalties, the absence of construction defects insurance places the project owner in a position of major financial vulnerability if defects arise. Without this cover, he or she must bring, at his or her own expense, liability actions against defaulting builders, bear the costs of technical expert examination and advance the cost of repairs.

These ten-year liability proceedings generally extend over several years. The technical complexity of the cases, the multiplicity of those involved and the delaying strategies of builders' insurers considerably lengthen resolution times. An owner facing structural defects may wait five to seven years before obtaining final compensation, while bearing the progressive deterioration of his or her property assets.

Impact on resale and financing

The absence of construction defects insurance directly affects the market value of the work and complicates its marketing. Potential purchasers, informed of this shortcoming, generally require a substantial discount to compensate for the risk assumed. Notaries are under an obligation to inform purchasers of this situation in the sale deeds.

Credit institutions also build this parameter into their risk analysis. A dwelling without construction defects insurance may be subject to degraded financing terms or a refusal of the loan, particularly for recent buildings where the risk of ten-year defects remains high.

Optimising cover: practical advice

Choosing the insurer and negotiating the terms

The selection of the insurer is a decisive step in optimising your 2026 construction defects cover. Companies that focus on construction insurance generally have greater technical expertise and networks of experts familiar with the specifics of the building trade. Their experience of ten-year claims enables them to offer more precise terms of cover and more efficient compensation processes.

The comparison of offers should not be limited to the cost of the premium. Excesses, compensation ceilings, specific exclusions and claims-handling times are essential parameters. An excess of €1,500 may prove penalising for minor defects, while an insufficient compensation ceiling exposes the owner to a significant shortfall on large claims.

Coordination with other insurance

Construction defects insurance interacts with other cover that the project owner must coordinate intelligently. Contractors' all risks insurance (assurance tous risques chantier, TRC) covers damage occurring during the construction phase, while multi-risk home insurance takes over for damage that does not fall within the ten-year scope. The real extent of this cover, in particular where a contractor defaults during the works, is dealt with separately in our article on contractors' all risks insurance.

Good coordination avoids gaps in cover and optimises the overall cost of insurance. Some insurers offer bundled packages combining construction defects insurance, TRC and supplementary cover. These packages, negotiated as a whole, often make it possible to achieve substantial savings while simplifying contract management.

Monitoring during the construction period

Construction defects insurance does not remove the need for rigorous monitoring of the site. The project owner retains a direct interest in preventing defects from arising, even if covered by insurance. Defects always generate nuisance, delays and uninsured costs (temporary rehousing, loss of enjoyment) that the insurance does not fully compensate.

Putting in place technical inspection, even where not mandatory for detached houses, is often a profitable investment. These bodies detect technical non-conformities before they generate significant pathologies. Their involvement makes it possible to correct defects during the construction phase, thereby preventing them from developing into ten-year defects.

Anticipating regulatory developments

Construction obligations evolve regularly under the effect of new environmental regulations and feedback on building pathologies. The RE2020 thermal regulation, bio-sourcing requirements and new insulation techniques are changing the construction landscape and generating new insured risks.

Project owners engaging in innovative projects must anticipate these regulatory developments. A building meeting the 2026 standards for energy performance will benefit from better long-term valuation and potentially more favourable insurance terms. Insurers are beginning to build environmental criteria into their pricing grids, rewarding virtuous buildings.

Frequently asked questions

Is construction defects insurance mandatory for all renovation works?

The obligation covers only works altering the structure of the work or creating a new element subject to the ten-year guarantee. A complete renovation with a change in the distribution of loads, the creation of openings in load-bearing walls or the transformation of the roof triggers the obligation. By contrast, electrical rewiring to bring the installation up to standard, replacement of equipment or redoing of interior finishes are generally not subject to it.

What happens if I discover the obligation after the works have started?

Late subscription remains possible but exposes the owner to criminal penalties and complicates obtaining cover. Insurers rarely agree to cover a site that is already open, except in return for significant surcharges and extensive exclusions. Regularisation is nevertheless necessary in order to benefit from protection, even partial, and to avoid aggravation of the penalties.

Is the cost of construction defects insurance tax deductible?

For private individuals, this insurance is a construction cost that is not deductible from their income. Property professionals (property dealers, developers) may, on the other hand, include this charge in their deductible cost prices. Professional landlords carrying out works in their investment buildings also benefit from this deductibility under certain conditions.

Does the insurance cover defects discovered after ten years?

The cover ends at the end of the ten-year period, that is ten years after acceptance of the works. Damage appearing after that date is no longer guaranteed, even if it results from earlier defective workmanship. This time limit underlines the importance of careful monitoring of the work during the first years following acceptance.

Can I cancel my construction defects insurance during the period?

Construction defects insurance cannot be cancelled during the whole ten-year period. This rule protects the successive purchasers of the work, who automatically benefit from the cover taken out by the initial project owner. The premium is generally paid in a single payment on subscription, covering the whole ten-year period.

Does the insurance work if the defaulting contractor has no ten-year insurance?

Construction defects insurance pays compensation regardless of the solvency or insurance cover of the builders. This lump-sum guarantee is precisely its main advantage: it works even in the event of default, compulsory liquidation or absence of ten-year insurance of the contractor responsible for the defects. The insurer then exercises its recourse according to the possibilities available.

Must a private individual buying a new home take out new insurance?

The purchaser of a new home automatically benefits from the construction defects insurance taken out by the developer-seller. This cover is transferred to him or her on sale without any particular formality and at no additional cost. The notary must mention the existence and references of this insurance in the sale deed. When buying an older home that has recently undergone works, the existence and validity of this cover should be checked.

Summary and recommendations

Construction defects insurance is an indispensable protection for any project owner, private individual or professional. Its mandatory nature should not obscure its practical usefulness: it guarantees rapid compensation of ten-year defects without waiting for the often uncertain outcome of liability actions. The criminal and financial penalties incurred in the absence of cover reinforce this absolute need for cover.

The evolution of the construction sector, marked by new environmental requirements and the emergence of innovative techniques, is changing the landscape of insured risks and calls for particular vigilance in the choice of cover.

Before embarking on any construction project, systematically check your insurance obligations and seek several detailed quotes from insurers that focus on construction. Prior consultation of a construction law professional makes it possible to identify the specific features of your project and to optimise your risk cover strategy.