Chain liability · duty of care · environment
Liability insurance for a contracting firm
A contracting business directs its own people, agency workers and subcontractors at sites it does not manage itself. Liability runs right through that chain, and the policy has to follow it.
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Deze pagina in het Nederlands: Aansprakelijkheidsverzekering voor een aannemersbedrijf.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Three streams of loss come together in a contracting business. The first is injury to staff: falls from height, crushing, a collision on the building site. The duty of care under Article 7:658 of the Dutch Civil Codeapplies to that, and through subsection 4 it also extends to agency workers and self-employed people hired in who work under your direction. The second is damage to third parties: a cracked facade next door, a mains pipe that is struck, materials falling from scaffolding. The third is damage that your completed work causes later on.
That last one is where most discussion arises. The cost of putting right your own work is excluded; the consequential loss that the defect causes the client or a third party does in principle fall under it. The works in progress you do not insure here but on a Construction all risks (CAR) insurance, and liability relating to soil and groundwater belongs on an environmental damage insurance. The basic structure of the liability cover is set out on the hub page public and employers' liability insurance.
When applying, watch the described business activity. A business that started with conversions and has taken on demolition, asbestos removal or earthworks has a policy that no longer fits. Your own position in the chain counts as well: if you work as the main contractor, you can be held liable for subcontractors' mistakes and you have to check their cover. Record that they have liability insurance of their own and ask for a certificate of insurance every year. You can read more about the wider insurance needs at insurance for a building contractor.
This page deals with one situation. The full overview is on Compare public and employers' liability insurance (AVB).
What to look out for
Four subjects that weigh most heavily in a business with staff and subcontractors.
Demonstrably meeting the duty of care
After an accident at work the insurer looks at the risk assessment, the toolbox talk records, the inspections of scaffolding and lifting equipment and the instruction given to new workers. Under Article 7:658 of the Dutch Civil Code the burden of proof lies largely with you. If the records are missing, you are empty-handed both towards the employee and towards the labour inspectorate.
Staff on the road
If employees drive a van or light commercial vehicle between projects, the ordinary AVB is not sufficient for that. Loss suffered by the employee as a driver falls under separate employers' liability cover; which version you need is set out at WEGAS and WEGAM. Without that cover you pay a road injury claim out of your own resources.
What certainly falls outside the cover
Excluded are fines and penalty payments after an inspection, damage caused with a motor vehicle (Article 2 of the Dutch Motor Insurance Liability Act (WAM)), property that you in your care has, asbestos and gradual soil pollution, and liability you bear only under a contractual guarantee. Damage caused deliberately falls away under Article 7:952 of the Dutch Civil Code.
Turnover, wage bill and adjustment
The premium runs on a basis that you declare yourself. If you take on a large project or the workforce grows halfway through the year, report that in the meantime. A consistently low declaration leads not only to an additional charge but can also reduce the payout after a loss under Article 7:930 of the Dutch Civil Code: turnover that runs through subcontractors counts separately
What does your premium depend on?
- Payroll: decisive for the employers' liability section
- Annual turnover: with an adjustment at the end of the insurance year
- Work put out to others: new build, renovation or demolition weigh differently
- Nature of the projects. VCA certification and demonstrable supervision work through in the acceptance
- Sum insured: per claim and per insurance year
- Prevention and certification A passer-by is struck by material falling from the fourth floor
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | CAR |
|---|---|---|
| An agency worker falls through an uncovered opening and breaks a hip | Yes | No |
| A storm blows the roof structure just erected off the shell | Yes | No |
| Building materials already delivered to the site are stolen overnight | No | Yes |
| The labour inspectorate imposes a penalty payment after an accident | No | Yes |
| The client withholds part of the contract sum because of late completion | No | No |
| The liability policy follows the loss to third parties and the project policy follows the works. If something falls under neither, it stays with the business. | No | No |
Am I liable for a mistake by my subcontractor?
Frequently asked questions
This is what people ask us most.
Towards your client usually yes: you took on the work and are responsible for its execution, even where someone else carries it out. Your policy can cover that claim, but the insurer will try to recover from the subcontractor. Check in advance, therefore, whether he is sufficiently insured himself.
Is damage to the building we are working on covered by the policy?
Only in so far as it does not concern the works in progress or the part you have in your hands. The existing part of the building can be covered, but many policies have a separate provision for that with a limit of its own. On a construction all risks (CAR) insurance, existing property is a separate section that you can include.
What happens in an accident involving an agency worker?
The agency worker can hold both the agency and you liable. Your duty of care follows from
The agency worker can hold both the agency and you liable. Your duty of care follows from Article 7:658(4) of the Dutch Civil Code, because he works under your direction on your project. Make sure hiring-in is declared on the policy and that the instruction and personal protective equipment for this group are arranged just as well as for your own staff.
Does the policy cover damage from piling or vibration?
Damage to third parties' buildings can be covered, but insurers often attach conditions to it, such as a structural survey beforehand and vibration measurements. Without that supporting evidence, causation is hard to prove and you are left with the claim. Discuss this before starting a project in an urban area.
Read more
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