Architect's decennial insurance: cover survives termination of the contract

Imagine: you are the owner of a brand-new building in Viry-Châtillon, in the Paris region. A few years after construction, cracks appear, infiltrations occur. You turn to the architect. But wait, his insurance has been terminated in the meantime. Do you think you can still obtain compensation? The Cour de cassation, in a ruling of 5 December 1972, decided: the insurer can be required to cover the architect, even if the contract is no longer in force at the time the damage appears.

For anyone buying, constructing or renovating, the question of professionals' insurance is often a mystery. Who is covered? For what damage? And above all, until when? This decision, although old, lays down a founding principle: it is the date of the construction act that triggers the cover, not that of the appearance of the defects. What should you remember? A terminated insurance contract does not erase faults committed while it was in force.

But how did the court reach this conclusion? What were the parties' arguments? And above all, what does this decision concretely mean for you, owner, tenant or developer? In this article, we dissect the 1972 ruling, its practical implications and the precautions to take so as not to be left stranded. Ready to see more clearly?

The facts: a story that happens every day

Let's go back to the early 1970s, in the town of Viry-Châtillon, south of Paris. A housing development rises from the ground – the Parc du Château – designed by an architect named Vaugelade. Like any project manager, he had taken out professional liability insurance, covering the consequences of possible defects. The buildings are delivered, but shortly afterwards, defects appear. Nothing spectacular at first sight, but serious enough to trigger the architect's liability.

Problem: between the construction phase and the appearance of the damage, the architect changed insurer – or rather, the initial contract was terminated. When the aggrieved owners come forward, the insurer refuses to cover the claim. Its reasoning? At the moment the cracks and infiltrations are revealed, the policy is no longer active. The architect, however, considers that the cover should apply since the works were carried out during the coverage period. Who should give way?

The dispute lands before the courts. The Paris Court of Appeal orders the insurer to indemnify. The latter appeals to the Cour de cassation, invoking a 'paragraph' of the policy which, according to it, limited its obligation. It criticises the judges for having distorted its submissions and for having ruled beyond what the parties requested. But the high court dismisses the appeal: the trial judges merely did their duty by interpreting the parties' submissions, without exceeding their powers. They were 'obliged to rule on the nature of the insurance at issue'.

The court's reasoning – broken down

The ruling of the Cour de cassation of 5 December 1972 does not contain a lengthy theoretical development. Its strength lies in a simple statement: it was without distorting the submissions or going beyond the debate that the Court of Appeal decided. To understand fully, we must dwell on the fundamental distinction between two types of insurance in the construction field.

The insurer argued that it was a 'damage insurance for the sole benefit of the contractor'. In other words, a policy that indemnifies the policyholder for damage suffered to his own structure, without any link to liability towards third parties. Such cover, by its nature, activates when the damage occurs – here, after termination. The architect, on the other hand, claimed cover for his professional liability: a 'liability insurance' that covers the financial consequences of a fault committed in the exercise of his activity. In this second case, the triggering event is the wrongful act (the design or site supervision), not the appearance of the cracks.

What was the contract taken out by the architect Vaugelade? The trial judges, reading the parties' submissions, considered that the debate required a decision. Since the insurer itself had argued that its cover was damage insurance, and the architect had asked to be covered for his liability, it was necessary to determine the exact classification of the policy. The Court of Appeal ruled in favour of liability insurance: the insurer's obligation arises from the moment the fault is committed, that is, during the term of the contract. Subsequent termination does not extinguish this obligation.

In so doing, the decision confirms a principle that has become classic: in matters of liability insurance, the claim is deemed to have occurred on the date of the harmful event, not on that of its manifestation. The insurer thus remains bound even if the victim only complains years later. The Cour de cassation simply verified that the judges had not distorted the submissions and that they had stayed within the framework of the trial. A solution which, at the time, reassured both project owners and professionals.

What it means for you – in practice

You are the owner of an apartment in Paris, in a building constructed seven years ago. You discover a roof leak causing mould. The architect tells you his insurance was terminated three years ago. Should you give up? No. If his liability is engaged (for example, a design error), you can act against the insurer that covered him at the time of construction. The principle established by the 1972 ruling works in your favour: what counts is the date of the fault, not that of the damage.

Same logic for a buyer who discovers hidden defects after purchase. Suppose a house in Paris, accepted in 2016, where cracks appear in 2023. The architect no longer practises, his contract has ended. The historical insurer can still be called upon to provide indemnity, provided that the defects fall within the decennial warranty (damage compromising the solidity of the structure or rendering it unfit for its purpose). The sums at stake are often high: a structural repair can cost €50,000 or more. Choosing the wrong insurer means risking paying out of your own pocket.

Developers and managing agents of co-ownership are not left out. In Paris, many new residences experience waterproofing problems in the first years. If the contractor's insurance contract has expired, the managing agent must identify the policy in force at the time of the works. A simple reflex: ask for an insurance certificate for each contractor when the contract is signed, and keep it for as long as the decennial warranty runs (10 years). You will save yourself a lot of trouble.

Four tips to avoid this type of dispute

• Demand a dated insurance certificate. When signing any construction or project management contract, ask for a certificate of professional liability and decennial insurance. Check that it covers the period of the works, and not just the date of the day.
• Keep all documents. Invoices, service orders, site reports: keep them for at least ten years. This is often the only way to prove the intervention of a professional and the date of his services.
• Notify damage without delay. As soon as a defect appears (crack, infiltration), inform all the contractors and their insurers in writing, even if the contracts appear to have expired. Case law imposes a two-year period to act from the discovery of the damage, but better to anticipate.
• Seek assistance from the amicable stage. A specialised lawyer can analyse the insurance policies, determine the date of the triggering event and engage the correct cover. A preventive judicial expert assessment can also secure evidence before the situation worsens.

Further insight: related case law and developments

The 1972 solution is no legal anomaly. It fits into a line of rulings that distinguish between damage insurance and liability insurance. Much later, the Cour de cassation would recall, for example in a ruling of 28 March 2001 (appeal no. 98-21.138), that 'the liability insurer is bound to cover the consequences of the insured's fault, even if the damage is only discovered after the expiry of the contract'. The principle has remained constant, even after the 2003 reform which introduced the concept of 'claims-made' insurance for certain professions.

Note, however: since then, some professional liability insurance contracts operate on a 'claims-made' basis: the insurer covers claims where the first notification is made during the period of validity of the contract, regardless of the date of the harmful event. This regime, more favourable to insurers, is strictly regulated and does not apply to compulsory insurance such as decennial insurance. For architects, the basic contract remains decennial insurance, which follows the 'loss-occurrence' regime. The 1972 ruling thus retains all its relevance for this type of compulsory cover.

Key takeaways

• Can an architect's insurer refuse cover on the grounds that the contract was terminated before the appearance of the defects? No, if the fault was committed during the period of validity of the contract, the insurer remains bound, even if the damage is only revealed afterwards.
• Does this principle apply to all types of construction insurance? It essentially applies to liability insurance, such as decennial insurance or professional liability insurance. Damage (works) insurance may follow a different logic.
• What is the time limit to act against the insurer? You have ten years from the acceptance of the works for defects falling within the decennial warranty, and two years from the discovery of the damage to engage contractual liability.
• How can one know whether the architect's insurance was in force at the time of the works? Ask for an insurance certificate for the relevant period; in the event of refusal, an order to disclose can be sought in court.
• Is this case law still current? Absolutely. It has been constantly confirmed and remains the foundation of the direct action of victims against the insurer of the faulty contractor.

Are you in a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of litigation – and often much more. Book an appointment →