Despite thorough planning and execution, certain risks cannot be ruled out when realizing the dream of owning a home. Taking out suitable insurance can help here.
Here are a few examples from practice: During construction work, a passer-by falls on the public sidewalk, which is dirty due to the work. During an inspection of the shell, a friend of the client steps on a nail and is injured. The client is generally responsible for maintaining safety on the construction site with respect to the injured parties and can therefore be held liable for damages for violating safety obligations.
Another example: helpful neighbors are helping the client to clean up the construction site and one helper is injured by the other through carelessness. The person causing the damage may be liable to a considerable extent, e.g. for the injured party's incapacity to work or for damages for pain and suffering.
These risks for the building owner and for those working on the construction site as unpaid volunteers can be covered by building owner liability insurance. The contributions depend on the total construction costs and the personal contribution, but are very low in relation to the risk covered. From the groundbreaking ceremony to the completion of the construction work (final acceptance), this insurance protects against claims for damages under private law. The insurance company checks the claims, settles justified claims and assists in defending against unjustified claims.
A completely different, often overlooked risk is the damage or destruction of the building due to circumstances for which neither the client nor the contractor is responsible. Examples of this can be found in daily practice: during heavy storms and rainfall, an embankment breaks away and the basement is flooded with mud and water. Children play with fire in the building shell and cause fire damage. When the property is connected to the public water supply, the main supply line is not properly secured and the entire building is flooded, causing the screed and insulation to dry out and the lightweight partition walls to need to be completely replaced. On the completely finished building, a graffiti sprayer "immortalized" himself on the exterior plaster the night before the acceptance. The law provides a solution for these cases. Until acceptance, the contractor bears the performance risk, i.e. he is obliged to ensure that the object is free of defects and ready for acceptance, without being entitled to any additional remuneration from the client. If the VOB/B has been effectively made the contractual basis or a corresponding individual agreement has been made, the tables are turned. Here, too, the contractor must ultimately deliver a defect-free result, but he retains the right to remuneration for the defective performance. So here the client pays twice.
If a third party is liable, the builder or the building contractor can, of course, claim damages from them. However, in most cases, the parties causing the damage cannot be identified or are insolvent.
Even if the builder or building contractor is the beneficiary of the risk-bearing rule in individual cases, this often leads to the failure of the construction project because the other contractual partner is unable to raise the construction costs a second time.
By taking out construction insurance, the building owner and the contractor can avoid the hassle of discussing and possibly litigating over the transfer of risk and also avoid disputes with those potentially responsible for the damage. This insurance covers the risk of unforeseen destruction of or damage to the building. The insurance applies regardless of whether the contractor or the client bears the performance risk. In any case, a fire insurance policy should be included for the shell of the building.
The premium for the construction performance insurance is around one thousandth of the construction sum, i.e. for a construction volume of €200,000, €200-300 has to be spent. Since this insurance safeguards the interests of both the client and the construction companies involved, it is usually possible to agree on apportioning the insurance premium among the various parties. This noticeably reduces the costs for each individual involved in the construction.
In summary, it should be noted that for every construction project, the conclusion of a building owner's liability and a construction performance insurance policy with shell fire insurance for the building owner is a sensible, even necessary investment.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.