Insurance for developers
Obligations
Law 38/1999 dated 5th November, concerning Building ordinance establishes the obligation for promoters, promoter-constructors or constructors if they work for the promoter, to contract insurance against material damage to guarantee, for a duration of 10 years, against the possible damage which could be caused in the building for faults or defects which originate in the fundamental structure or base of the construction.
Scope
Guarantee, for ten years from the date on the document to accept the worksite, compensation or repair of:
- Material damage caused in the insured building due to faults or defects which originate or affect the foundations, supports, frame, beams, load-bearing walls or other structural elements which directly affect the building’s mechanical resistance and stability.
- The costs for demolition and clearing which were necessary as a consequence of material damage to the construction covered by the policy
Coming into force
This is conditioned by the intervention from the TECHNICAL INSPECTION BODY for the project, from the start of the work or use of the material onsite and the tests carried out by an accredited laboratory, which must be contracted by the Policy Holder and accepted by the Insurance Company.
The promoter, initial property holder and successive owners of the building or part of it for the ten years that the policy lasts.
What is the insured capital?
The assured sum must correspond to the total provisional cost of the building work including:
- Cost of material execution of the worksite.
- Project and site management fees.
- Technical Inspection Body fees.
- Permits and taxes required
Cover
This insurance policy provides the following cover:
Main:
- Material damage to the building due to faults or defects in the structural elements.
- Demolition or clearing costs.
Optional:
- Automatic reassessment of the insured sum.
- Abandoning the resource against the main contractor.
Exemption
In the event of an accident, exemption is established on the insured sum, which will be deducted from the compensation which must be paid by the company in the event of an accident; this will be paid by the policy holder; it can be negotiated with the company, with a maximum of 1% of the insured sum.
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