A foreign-owned company can be fully registered in France and still discover, after a client complaint or a serious operational incident, that its insurance does not cover the activity actually performed. The difficult question is rarely just “Do I need professional liability insurance in France?” It is whether the correct French entity is insured, for the correct services, in the correct territory, with limits and exclusions that match the business model. A parent company policy issued abroad may be useful evidence, but it does not automatically replace a policy naming the French subsidiary or extending expressly to a French branch. Nor does a certificate of insurance prove every promise made by the policy.

This guide applies to foreign founders, groups and companies conducting business through a French company or branch. It separates legal insurance obligations from prudent contractual protection, explains the role of the Kbis (the official extract identifying a company registered in the French Trade and Companies Register), and gives a claim-response method. It also addresses the insurance provisions introduced by Law no. 2026-403 of 26 May 2026, whose practical implementation must still be checked against the relevant decrees. For the broader set-up and compliance sequence, see this French company formation and compliance roadmap. The position described here was checked for this publication on 27 August 2026.

I. Is professional liability insurance mandatory for a foreign-owned company in France?

A. When French law requires insurance because of the activity, the premises or employees

There is no single rule requiring every French company to purchase a generic professional liability policy. The legal answer depends first on what the company does, and only second on who owns it. A French subsidiary owned by a United States, United Kingdom, Canadian, Swiss or other foreign parent is subject to the French rules attached to its activity in the same way as a domestically owned company. Ownership does not create a general exemption, but it also does not create a general insurance obligation where French law has not imposed one.

The official Service-Public Entreprendre overview of company insurance makes the starting point clear: insurance is not always mandatory. Compulsory cover can arise from a regulated profession, from the use of a vehicle, from a lease or from a specific statutory regime. A company should therefore map each operating risk before deciding that a short online “RC Pro” quote solves the problem. “RC Pro” is the common French abbreviation for responsabilité civile professionnelle, meaning professional civil liability insurance. In English policies, the comparable expression is often professional liability or errors and omissions insurance.

The first category is an activity-based obligation. Certain professions cannot lawfully operate without professional liability cover, a financial guarantee or a sector-specific policy. Examples can include regulated legal, accounting, health, financial, property, transport and construction activities, although the exact obligation and minimum limit must be checked in the legislation governing the profession. A foreign parent that sends a French subsidiary to provide regulated services cannot rely on the parent’s general corporate insurance without checking whether the policy satisfies the French statutory regime, names the right insured, and is issued by an insurer permitted to cover the risk.

Construction creates a distinct and particularly strict example. A company carrying out work that falls within the statutory ten-year construction liability regime may need decennial insurance before the work begins. That is not the same product as ordinary professional liability insurance. Decennial cover concerns damage affecting the solidity of the work or making it unfit for its intended use during the relevant period. A foreign-owned engineering, construction or renovation group must also separate design advice, site supervision, construction work, product supply and subcontracting in its declarations. A policy covering consulting services may leave the actual construction activity outside its scope.

The second category concerns the premises and equipment. A landlord may require insurance for rented premises, and a company using vehicles must comply with compulsory motor insurance rules. These covers protect different interests from professional liability. Property insurance may respond to fire, water damage or theft affecting the company’s own assets. Operating or public liability may respond when a visitor, customer or other third party suffers bodily, material or consequential financial damage because of the company’s operations. Professional liability generally addresses a negligent act, error, omission or breach in a service, advice, design, deliverable or professional performance. One policy may combine these risks, but the headings on a certificate are not a substitute for the wording.

The third category concerns employees. A foreign founder hiring the first French employee must consider employment-related obligations and, where applicable, an employer-financed supplementary health plan. That obligation is not professional liability cover. It protects healthcare costs under the relevant employment framework; it does not normally indemnify a customer who claims that the employee’s professional mistake caused a loss. Similarly, workers’ compensation, employer liability, cyber cover and directors’ and officers’ liability can address different events. A company with a remote employee in France, a French office and customers in several countries should build a risk matrix rather than purchasing the cheapest policy bearing the words “business insurance.”

Even where no statute makes professional liability insurance compulsory, three practical forces can make it essential:

• A customer, marketplace, bank, public authority or commercial landlord may require an attestation before the contract, payment or access is granted.
• A regulated customer may impose contractual insurance limits, territorial requirements, subrogation provisions or a duty to maintain cover after termination.
• The company’s own balance sheet may be unable to absorb a claim involving a customer’s lost revenue, data, production stoppage, regulatory response or third-party compensation.

That distinction matters for directors. Not buying optional cover is not automatically a breach of a director’s duty. But deciding that no cover is needed without documenting the activity analysis, customer requirements, foreseeable loss and group policy review can create a governance problem. The board or president of a French SAS, or the manager of a French SARL, should keep a written insurance decision: activities, territories, turnover, subcontractors, employees, premises, contractual commitments, policy limits, exclusions, renewal dates and the person responsible for notifying changes.

A foreign group should also identify the French administrative footprint. The Kbis identifies the registered company and its main registered activities; the SIREN is the nine-digit company identification number, while the SIRET identifies a particular establishment. The greffe is the commercial court registry office that handles company-register formalities. The INPI, the French National Institute of Industrial Property, operates the single business formalities portal. None of these documents is itself an insurance policy. However, insurers, customers and authorities may compare the declared activity, registered address and actual operations. A mismatch is an avoidable source of dispute.

B. What a foreign founder must verify in territorial scope, insured identity and declared activity

The most common cross-border error is to treat group ownership as if it were insurance identity. A policy issued to “Global Parent Ltd” does not necessarily insure “French Subsidiary SAS,” even if the parent owns 100% of the shares. A subsidiary has its own legal personality, contracts and liabilities. A branch or succursale may be legally connected to the foreign company, but the policy still needs to address the French establishment, the activity conducted in France and the claims route available to French customers. Ask for the schedule, endorsements and definitions, not only a one-page certificate.

At minimum, compare the following with the French operating model:

• The exact legal name of the insured entity, including its legal form and registered address.
• Any named parent, subsidiary, branch, director, employee, consultant or subcontractor who is intended to benefit from the cover.
• The professional activities declared, including secondary, pilot, occasional or newly launched services.
• The territory where the work is performed, the territory where the customer is located, and the territory whose courts may hear the claim.
• The policy period, retroactive date, extended reporting period and rules for claims first made after termination.
• The per-claim limit, annual aggregate, deductible, defence costs, sub-limits and the treatment of multiple related claims.
• Exclusions for United States or Canadian exposures, sanctions, intellectual property, cyber incidents, pollution, bodily injury, construction, financial loss, contractual penalties and work performed by unapproved subcontractors.

Territory is not a single box. A policy may say “worldwide” but exclude claims brought in the United States, damages governed by United States law, or services delivered to a United States customer. Another policy may cover activities performed in France but require claims to be brought in the European Union. A British parent after Brexit may have a global programme that is valid for the group but leaves questions about local admitted insurance, premium allocation, tax, regulatory permission and the French entity’s direct right to make a claim. A certificate must be read alongside the territorial, jurisdiction and applicable-law clauses.

For a French SaaS or consulting company, describe the service precisely. “Technology” is not a sufficient declaration if the company also provides implementation, financial modelling, regulated advice, cybersecurity, data processing, product configuration or operational decisions. For a recruitment business, distinguish introductions, payroll services, compliance advice and employment administration. For an import or distribution company, distinguish product liability, logistics, storage, installation and warranty work. The insurer assesses risk through the facts supplied at inception and during renewal. The company should not minimise a secondary activity simply because it is expected to be small.

The French Insurance Code makes disclosure an ongoing duty. Under Article L. 113-2 of the Code des assurances, the insured must answer the insurer’s questions accurately and declare new circumstances that aggravate the risk or create a new one. The text sets a fifteen-day period for declaring such circumstances after the insured knows of them. For a claim, it requires notice as soon as the insured knows of an event that may trigger cover, within the contractual period, which cannot be less than five working days. The statutory wording is: Ce délai ne peut être inférieur à cinq jours ouvrés. A policy can require earlier notice or a special method, so the company should not wait for certainty about liability before notifying.

The consequences depend on good faith and the timing of the discovery. Article L. 113-9 of the Code des assurances distinguishes an innocent omission from intentional concealment. If an inaccurate declaration is discovered after a claim and bad faith is not established, the indemnity can be reduced in proportion to the premium paid compared with the premium that should have been paid. The official wording expresses the mechanism as l’indemnité est réduite en proportion du taux des primes payées. If the insurer proves intentional concealment that changes the risk or reduces its assessment, Article L. 113-8 provides for nullity of the insurance contract. The company should therefore keep the completed proposal, underwriting emails, activity descriptions, revenue forecasts and all renewal questionnaires.

The case law illustrates why the declared activity must be analysed at the level of the actual work. In Cass. 3e civ., 27 June 2019, no. 17-28.872, the Court of cassation approved a finding that a mission not declared to the insurer could lead to a proportional reduction under Article L. 113-9; where no premium had been paid for the risk, the reduction could amount in practice to no indemnity. That decision concerned a construction professional, but its lesson is wider: a general company description is not a safe substitute for the activity and project information the policy asks for.

In Cass. 2e civ., 2 July 2015, no. 14-20.508, the dispute concerned the date of effect, declared professional services and specialised financial guarantees. The decision shows why a group should check whether a policy covers the service actually performed and the date on which the relevant funds, advice or operation fell within the cover. In Cass. 3e civ., 21 January 2016, no. 14-25.720, the contract’s professional liability guarantee was tied to damage caused to third parties in the declared activity, while the wording also defined who counted as a third party. A French company should make that analysis before a customer dispute, not after a denial.

The distinction between subsidiary, branch and parent should be included in the insurance procurement file. For a subsidiary, request an endorsement or local policy naming it directly. For a branch, confirm that the foreign company’s policy covers liabilities arising from the French establishment and that the claims process can operate in France. For a foreign parent that contracts directly with French customers while using French personnel or premises, determine which entity is the contracting party and which entity may be sued. If the policy insures only the parent, a customer may still pursue the French company or a director who is not an insured person. The answer turns on the contract, the legal entity and the wording, not on the group chart alone.

II. How should a foreign-owned company choose the policy and respond to a claim?

A. How to read limits, exclusions, claims-made wording and the 2026 SME reforms

A policy comparison should begin with the insuring agreement and then move through the exclusions, definitions, conditions and endorsements. The label “professional liability” tells you less than the trigger. Some policies respond to the occurrence of a wrongful act; others are claims-made policies that require the first claim to be made and notified during the policy period, subject to a retroactive date and an extended reporting period. A foreign-owned company changing insurers must map known circumstances, prior acts and pending complaints before cancelling the old policy. Switching insurers without that map can create a gap even when the new certificate starts on time.

Read the difference between a third-party loss and the cost of correcting the company’s own work. A client may claim the cost of a defective deliverable, lost operating time, the cost of a replacement provider and a regulatory investigation. The policy may cover some consequential financial loss while excluding the fee to redo the company’s own work. In Cass. 3e civ., 24 November 2016, no. 15-25.415, the Court of cassation examined a clause excluding costs for replacement, reinstatement or reimbursement of goods supplied and the cost of redoing the work, while the policy separately addressed consequences of civil liability to third parties. The practical question is not whether a loss feels connected to the error; it is which head of loss the contract covers.

The exclusions must be specific enough to be understood and applied. Article L. 113-1 of the Code des assurances places losses caused by fortuitous events or the insured’s fault on the insurer, except for a formal and limited exclusion contained in the policy, while intentional or fraudulent fault is treated separately. The official text uses the words sauf exclusion formelle et limitée contenue dans la police. In Cass. 2e civ., 19 May 2016, no. 15-18.545, the Court of cassation addressed the requirement that exclusions be formal and limited and that an exclusion cannot empty the professional liability guarantee of its substance. A company should ask the broker to explain every exclusion that could apply to its main revenue stream and keep that explanation with the policy file.

An exclusion is not effective merely because an insurer can point to it after the event. In Cass. 2e civ., 7 November 2024, no. 23-10.612, the Court stated that an exclusion must have been brought to the insured’s knowledge when it joined the policy or at least before the loss occurred to be enforceable against it. The decision’s formulation includes the short passage une clause d’exclusion de garantie doit avoir été portée à la connaissance de l’assuré. Keep proof of delivery of the general conditions, special conditions, endorsements and renewal amendments. A certificate alone rarely proves that the insured accepted the full contract.

Intentional conduct is a separate boundary. A company may be insured for an employee’s negligent mistake, but a deliberate act designed to cause the loss will not normally be transferred to the insurer as if it were an accident. Cass. 2e civ., 1 July 2010, no. 09-14.884, considered the distinction between an intentional or fraudulent fault and a fault whose consequences were not deliberately sought. The director should not admit intentional wrongdoing in a customer email before the insurer has been notified and legal advice obtained; a factual acknowledgement of an event is not the same as accepting legal responsibility.

That last point is supported by Article L. 124-2 of the Code des assurances, which allows an insurer to provide that a recognition of liability or settlement made outside the insurer cannot be relied on against it. The same provision distinguishes an admission that a fact occurred from a recognition of legal liability. Send the insurer the customer’s letter, preserve the factual record, and reserve the legal position. If the injured third party seeks payment, Article L. 124-3 recognises the third party’s direct action against the liability insurer, subject to the policy and the applicable dispute.

Limits and deductibles need a business calculation. A €1 million limit may look substantial until a single claim combines customer losses, defence costs, expert fees and several related projects. Check whether defence costs erode the limit, whether there is an annual aggregate, and whether a low sub-limit applies to pure financial loss, cyber incidents, intellectual property, subcontractors or crisis management. Check the deductible in the same currency as the company’s cash flows. A policy denominated in pounds or dollars may produce uncertainty for a French company invoicing in euros. The directors should model a severe but plausible claim, not only compare annual premiums.

The recent French reforms also require careful timing. Law no. 2026-403 of 26 May 2026 on strengthening the rights of insured persons and improving insurance transparency is available in the official Journal on Légifrance. Its Article 30 amended several provisions of the Insurance Code. The updated Article L. 113-12 addresses annual termination of insurance contracts and expressly deals with professional contracts. The company should also note Article L. 113-12-1, which states that an insurer’s unilateral termination in the relevant cases must be reasoned.

These reforms do not mean that every French company can immediately cancel every professional liability policy whenever it wants. New rights may depend on the type of contract, the kind of risk and implementing decrees. In particular, Article L. 113-15-2-1 concerns a micro-enterprise or small or medium-sized enterprise’s ability, after one year, to terminate certain contracts covering direct damage to professional property. That is not automatically a right to cancel a professional liability policy covering advice or services. The company should verify the contract’s category, renewal date, notice route and the date on which the provision becomes operational for the relevant policy.

Likewise, Article L. 121-18 of the Code des assurances introduces a structured timetable for certain professional property damage claims when the insurer appoints an expert, including deadlines for an offer or refusal and later payment or repairs. Its wording must not be presented as a universal timetable for every professional liability claim. A pure financial-loss claim, a dispute about negligent advice or a third-party liability claim may follow different contractual and procedural rules. The responsible manager should identify which guarantee has been triggered before relying on a statutory deadline.

The distinction between property damage and professional liability is commercially important for a foreign group. A French warehouse may have a property claim after a fire, while a customer may bring a professional liability claim because the company’s supply-chain advice caused a production stoppage. The group’s global programme may respond to one, both or neither. The French entity should report facts under every potentially relevant section without making inconsistent admissions. A notice can state that the company is notifying circumstances under the property, operating liability, professional liability and cyber sections to the extent applicable.

Do not overlook company-owned intellectual property and data. A software consultancy may need professional liability for a flawed implementation, cyber insurance for a security incident, and an intellectual-property endorsement for allegations that its code infringes another party’s rights. A distributor may need product liability for bodily or property damage caused by a product, while the cost of recalling the product may require a separate extension. A director may need D&O cover, meaning directors’ and officers’ liability insurance, for allegations about management decisions; D&O is not a replacement for the company’s professional services liability. The policy architecture should follow the claim pathways in the business model.

B. How to preserve coverage, challenge a refusal and organise the evidence

When a claim arrives, the first objective is to preserve options. Create a dated incident file and notify every potentially responsive insurer or broker immediately. Use the contractual notification channel, keep proof of transmission, and state that the notification is precautionary if the company has not yet determined liability. Attach the customer’s complaint, contract, statement of work, deliverables, relevant correspondence, chronology and an initial estimate of the financial exposure. Do not wait for the claimant to quantify every loss.

The first notice should identify at least:

• The insured entity, policy number, policy period and broker or insurer contact.
• The date the company first became aware of the circumstance and the date the customer first complained.
• The service, product, advice or decision involved, including the personnel and subcontractors involved.
• The jurisdictions, customers and contracts potentially affected.
• The known bodily, material, financial, data or regulatory consequences, without presenting estimates as established facts.
• The urgent steps needed to prevent further loss, preserve evidence and meet a court, authority or customer deadline.

Preserve the original documents and metadata. Keep the executed customer contract, proposal, terms of business, purchase orders, change requests, approvals, delivery records, invoices, project tickets, source files, audit logs and relevant communications. For a French company, the file may also include its Kbis, INPI formalities, insurance certificate, full policy wording, endorsements and correspondence showing the activity declared at underwriting. Where a foreign parent provided the service, keep intercompany agreements, delegation documents, group policy schedules and the allocation of work between the parent and the French entity.

Protect legal privilege and confidentiality. Limit internal circulation of the incident report to people who need it. Separate factual preservation from legal analysis, and avoid speculative messages such as “we definitely breached the contract” or “the policy surely covers everything.” A customer-facing response can acknowledge receipt, protect safety and propose a factual meeting while reserving the company’s rights. Send copies to the insurer before agreeing to a settlement, credit, refund, repair programme or public statement if the policy requires consent.

A refusal should be analysed in layers. Ask the insurer to identify the precise insuring clause, exclusion, condition, definition, notice provision or alleged misrepresentation on which it relies. Ask for the complete version of the wording applicable on the date of inception and renewal, the endorsement history and the evidence that the relevant clause was supplied to the insured. Then compare the refusal with the facts actually declared. An insurer cannot turn a vague activity description into a new exclusion after the claim, but the company also cannot assume that a broad website description overrides a narrow schedule.

The first legal question is whether there is coverage before debating the amount. The second is whether the insurer can rely on the exclusion. The third is whether a condition, notification clause or cooperation duty was breached and whether that breach caused prejudice. The fourth is whether another insurer or guarantee must participate. A written coverage position should address each issue separately, with a chronology and the documents supporting the company’s interpretation.

French case law provides several useful control points. Cass. 3e civ., 20 January 2015, no. 13-12.127, is a reminder that an exclusion must be assessed by its precise wording and cannot be expanded beyond what the policy says. Cass. 3e civ., 28 September 2005, no. 04-14.472, concerned the limits of mandatory construction insurance and the professional activity declared by the constructor. The decision is particularly relevant to a foreign group that believes a construction or engineering policy is “global” without checking the declared sector. These authorities do not decide a new dispute automatically; they help frame the contractual analysis.

Do not confuse an insurer’s reservation of rights with a final judgment. An insurer may appoint an expert, request documents, investigate causation and reserve its position. Cooperate without conceding coverage or liability. If the insurer refuses to appoint counsel or denies the claim, preserve the refusal and ask for a reasoned decision. A claim can involve parallel negotiations, court proceedings, an expert process, a regulator, a customer’s insurer and a parent company. The company needs one controlled chronology and one authorised spokesperson.

Contract strategy can prevent the dispute. Before signing with a French customer, review:

• Any obligation to maintain professional liability insurance for a specified amount and period.
• Whether the customer requires to be named as an additional insured or merely asks for proof of cover.
• Whether contractual indemnities, penalties, service credits or unlimited liability are insurable under the policy.
• Whether the contract chooses French law, another law or a particular court, and whether the policy follows that jurisdiction.
• Whether the company must notify the customer of a cancellation, material change or reduction of limits.
• Whether subcontractors must carry equivalent insurance and provide evidence before starting work.
• Whether the customer’s audit, data, confidentiality and incident-notification clauses create an exposure excluded by the policy.

A certificate should be refreshed after each renewal and material change. Check the insured name against the current Kbis. Check the activity against the current website, customer contracts, invoices and business plan. Check turnover and employee numbers against the figures declared. Check that a new French establishment, warehouse or office is listed where necessary. Check that the broker has confirmed cover for services delivered by the parent, remote workers, independent contractors and French employees. If the business has expanded from consulting into implementation, resale, fintech, health, construction or regulated advice, notify the insurer before the new activity becomes normal practice.

Group programmes require a written local-subsidiary analysis. Ask whether the French company has a direct right to claim, whether the policy is governed by French law, whether the local admitted policy is primary, how deductibles are allocated, and whether the parent can settle a claim without the subsidiary’s consent. Confirm how currency, taxes, sanctions and insolvency are handled. If the group’s insurance is placed outside France, obtain a French-law review of the specific risk rather than assuming that an English-language certificate answers every French customer or authority requirement.

The official business records can help prove the company’s timeline. The RNE is the French National Business Register, and the BODACC is the Bulletin officiel des annonces civiles et commerciales, the official bulletin publishing certain civil and commercial notices. These records do not establish insurance coverage, but they may help prove registration, a change of activity, a restructuring, a merger or a publication date. Keep them with the insurance file when the claim concerns a transfer of business, a change of entity or a period before the French subsidiary began trading.

If the dispute concerns a professional activity requiring a statutory policy, verify the special regime before relying on general Insurance Code principles. Construction, regulated professions, financial guarantees and motor insurance each have their own requirements. In Cass. 2e civ., 2 July 2015, no. 14-20.508, the Court considered how a specialised guarantee related to the activities and period identified in the policy. The relevant question for a foreign company is whether the certificate, special conditions and statutory evidence all point to the same activity and insured entity.

Finally, record the decision after the claim. Note whether the insurer accepted, reserved or refused cover; which amounts are within the limit; which costs are excluded; what deadlines apply; who has authority to settle; and what changes are needed at renewal. If the claim reveals a gap, do not erase the old policy or rewrite historical records. Purchase a new extension for future exposures, preserve any available discovery period, and document the corrective action. That record is useful for the board, the parent company, lenders, customers and any later dispute about management decisions.

Conclusion

For a foreign-owned company operating in France, professional liability insurance is a legal question, a contract question and a governance question. French law may make cover compulsory because of the activity, premises or sector, but ordinary consulting, software, trading or administrative activity may instead be governed by customer requirements and the company’s own risk assessment. The correct policy must identify the French subsidiary or branch, describe every material activity, cover the relevant territories and respond to the way claims are actually made.

The practical test is simple: take the company’s current contracts, Kbis, invoices, personnel, premises and cross-border work, and compare them line by line with the policy schedule, definitions, limits, exclusions and notification rules. Preserve the underwriting record. Notify a potential claim promptly. Do not admit liability or settle outside the insurer’s process before checking the policy. The 2026 reforms may improve transparency and create new rights for certain professional contracts, but their scope and implementation must be checked for the particular risk. A foreign parent’s policy can be part of the solution; it should never be treated as proof that the French company is covered without a clause-by-clause review.

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