Building or renovating a property is a significant investment that also involves risks: accidents, damage to third parties, structural failures or weather events.
Having adequate insurance is not only a legal requirement in many cases, but also a key way to manage risk. Below, the personalHOME team summarizes the essential coverages at each stage of the project.
Before construction: Safety in design and environment
Before the first machine enters the site, risk already exists. It is essential to verify that the technicians (architects and technical architects) have valid Professional Liability Insurance in place, ensuring coverage for design or calculation errors in the project. Likewise, if you are carrying out a renovation or extension, it is essential to have Pre-existing Damage Insurance, which protects the structure already built before new work begins. Ignoring this phase can compromise the viability of the project even before it is set out.
During construction
Construction All Risks Insurance (CAR): this is the foundation of on-site protection. It covers material damage to the works in progress against unforeseen events such as fires, floods, theft, vandalism or execution faults. It is taken out at the start of the project and remains in force throughout the entire duration of the works.
Contractor’s liability insurance: covers damage to third parties arising from the construction works, such as impacts on neighbors, injuries to pedestrians or damage to nearby vehicles. It includes the contractor’s liability and, where applicable, that of subcontractors.
Accident liability and employer’s liability: Spanish labor regulations require construction companies to insure their workers against accidents, covering death, permanent disability and medical assistance. In addition, Employer’s Liability complements this protection by covering the company against claims for possible negligence.
💡Practical tip: the CAR policy must be taken out before starting any construction work. Otherwise, an initial uncovered loss may cause delays in the project. In addition to significant financial losses.
Upon completion of the works: post-construction insurance
Ten-year structural damage insurance: the LOE requires the developer to take out this insurance for residential buildings. It covers, for 10 years, serious structural damage affecting stability (foundations, columns, slabs, etc.). Without it, the first sale cannot be formalized.
Home or community liability insurance: once the owner takes possession of the property, they must have insurance: home insurance (individual dwellings) or community insurance (buildings). Both cover the structure against fire, water damage, glass breakage, theft and liability. If there is a mortgage, the bank usually requires this insurance.
Voluntary quality guarantees (three-year and one-year): in addition to the mandatory ten-year insurance, the LOE provides for voluntary guarantees: one year for finishes and three years for waterproofing and habitability. It does not require specific insurance to cover them, but many insurers offer policies that back them in the event of possible insolvency of developers or contractors.
Risk management in construction does not end with the completion of the works: it extends from the setting-out stage to years after delivery, with different risks at each phase. Having a well-designed insurance program at every stage protects assets and provides confidence to buyers, financiers and public authorities.
Insurance planning should not be understood as a sum of isolated policies, but as an ecosystem of active protection. While initial coverages protect capital and the continuity of the works, post-construction insurance ensures the financial health of the asset throughout its useful life. In a highly technical sector such as construction, the difference between a managed unforeseen event and an economic crisis lies in anticipation and in the correct interpretation of legal obligations and voluntary guarantees.
Understanding this lifecycle of risk is essential for any developer seeking not only to build, but to consolidate a secure and uncertainty-free asset base.
At personalHOME, as experts in comprehensive management within the Renovak Group, we provide the technical expertise necessary to ensure that every phase of your project is supported by the most demanding safety standards in the sector.
