Insurance: Two generalized guarantees next year
Insurance for all construction risks and a ten-year guarantee are also compulsory for constructions intended for housing and at the same time for one or more uses, in particular for hotels, for residential uses, and other uses
“We are working hard on the implementation decrees for construction site all-risks insurance and the Ten-Year Civil Liability Insurance. Those decrees will be published by the end of the year”. The announcement made by Othman Khalil El Alamy, acting president of the Insurance and Social Welfare Supervisory Authority (ACAPS), restores some hope for these two insurance policies provided for in the program contract of the industry signed in 2011. It must be said that Law 59-13 amending and supplementing Law 17-99 that established the Insurance Code was published in the Official Gazette in October 2016. While some regulations included in the law such as Takaful have entered into force, those establishing the generalization of construction site all-risks insurance and the Ten-Year Civil Liability Insurance have fallen far behind schedule.
In any case, the ACAPS authority has announced the entry into force of the new regulation for 2024, thus inviting insurers and brokers to prepare for it.
The generalization of these two insurance policies will strengthen the protection of third parties, secure investments, and contribute to improving quality in construction.
The contracting authority who carries out construction work or has it carried out must be covered, for the duration of the work, by insurance guaranteeing damage to the work and its civil liability for damage caused to third parties. The amount, per construction site and per event, of the Public liability insurance for construction projects may not be less than an amount which varies between 4 million dirhams (USD 400,000) and 40 million dirhams (USD 4 million). The methods for determining the minimum amount of guarantees will be specified by a regulatory text. The same applies to the deductible in terms of Public liability insurance for construction projects.
For its part, the Ten-Year Civil Liability applies to the repair of all damage caused to a structure excluding damage caused by war, riots, or acts of terrorism and sabotage. The carveout also concerns losses which result from the non-observance of the technical reservations issued by the testing and inspection firm and notified by the contracting authority.
Three floors
These two guarantees apply to any construction intended for housing but provided it has more than 3 floors or when the total covered area exceeds 800 square meters. All-risk construction insurance and the ten-year guarantee are also compulsory for constructions intended for housing and at the same time intended for one or more uses, in particular hotels, accommodation, or constructions used as a summer resort. Added to this are industrial uses, commercial uses, office use, or use for services or parking lots, places of worship, or medical institutions. Only structures built on behalf of the central government or local authorities are exempted. Ditto for maritime, lake, and river works, infrastructure equipment, engineering structures and civil engineering works such as roads and highways. Changes to an existing construction are also excluded.
