Dommages-ouvrage insurance lawyer in Paris: claims, refusals and compensation.

Dommages-ouvrage insurance, known as DO, is the compulsory property insurance that finances the repair of ten-year defects without waiting for liability to be determined. Article L. 242-1 of the Insurance Code (Code des assurances) requires the project owner to take it out before the works begin and guarantees, irrespective of any inquiry into liability, payment of the full cost of the repair works for damage of the kind for which builders are liable within the meaning of Article 1792-1 (our translation).

Its central value is that it pre-finances the works and allows the project owner to act quickly, without waiting for the builder at fault to be identified. The DO insurer then turns, by subrogation, against the ten-year liability insurer of the contractor concerned. For the project owner, DO insurance neutralises a major risk: the liquidation of the builder, or disputes between the parties involved that often paralyse compensation.

Article L. 242-1 of the Insurance Code requires it of any natural or legal person who, acting as owner of the building, seller or agent of the owner of the building, has construction works carried out (our translation). DO insurance must be taken out before the works begin. It follows the building: if it is resold within ten years, it benefits the successive purchaser.

Property developers (Article L. 242-2 of the Insurance Code) and individual-house builders are also covered. A few exceptions exist for public-law legal entities or large organisations carrying out works not intended for housing. In practice, for any individual who has a building constructed, heavily renovated or bought off-plan (VEFA), DO insurance is compulsory, and its absence always has consequences for the resale value.

The claim must be sent to the DO insurer as soon as the defects are known. General conditions usually provide for a period of 5 business days after discovery. The required form is a registered letter with acknowledgement of receipt or delivery against a receipt, in accordance with the requirements of Article L. 242-1 of the Insurance Code and Annex II to Article A. 243-1.

The claim must identify the insured building, describe the defects observed and attach the relevant documents (photographs, technical reports, warning letters). In a judgment of 12 January 2011 (No. 09-71.991), the Third Civil Chamber held that the insurer cannot validly notify its decision on the principle of cover to its insured within the time allowed without having first sent the preliminary expert report in its possession (our translation). Form and chronology are therefore decisive.

Article L. 242-1 of the Insurance Code sets two mandatory time limits. First, the insurer has a maximum period of sixty days, running from receipt of the claim, to notify the insured of its decision on the principle of triggering the cover provided for in the contract (our translation). Second, when it accepts that the cover applies, it has a maximum period of ninety days, running from receipt of the claim (our translation) to present an indemnity offer.

An additional period of 135 days may be obtained in cases of exceptional difficulty, but only with the express agreement of the insured and on reasoned technical grounds. The penalty for missing a deadline is severe: automatic increase of the indemnity to double the legal interest rate and loss of the right to dispute the cover later. The time limits are mandatory.

Several levers exist against a refusal of cover. First, check the formal regularity of the refusal: sufficient reasons, prior sending of the preliminary expert report, compliance with the time limits. On 12 January 2011 (No. 09-71.991), the Third Civil Chamber held that notifying a refusal without first sending the expert report exposes the insurer to the sanction of acquired cover.

Second, challenge the classification of the defects if the insurer relies on the absence of ten-year character. A court-appointed expert assessment ordered by urgent application under Article 145 of the Code of Civil Procedure allows an adversarial analysis to be obtained. Third, incur the repair expenses after notifying the insurer, which triggers the increase to double the legal interest rate if the refusal is unjustified. A writ of summons on the merits is often the outcome, before the Paris judicial court for a Paris building.

The DO insurer in principle compensates the project owner, not the contractors. The mechanism provided for by Article L. 242-1 of the Insurance Code is that of an indemnity offer, which may be provisional in nature and is intended for payment of the works to repair the damage (our translation). The insured then chooses the contractor who will carry out the repairs.

The indemnity is intended to finance the works: it must be applied to the actual repair. Case law holds that a project owner who does not carry out the works may see the claim limited to the real value of the repairs needed, and cannot pocket an indemnity exceeding that need. In some arrangements, and with written agreement, the insurer may pay the contractor directly by delegation of payment, but this remains the exception.

Article L. 242-1, paragraph 5 of the Insurance Code provides: Where the insurer does not comply with one of the time limits provided for in the two paragraphs above or makes a manifestly insufficient indemnity offer, the insured may, after notifying the insurer, incur the expenses necessary to repair the damage. The indemnity paid by the insurer is then increased automatically by interest equal to double the legal interest rate. (our translation)

The penalty is automatic once the conditions are met: the 60-day time limit for notifying the decision or the 90-day time limit for the indemnity offer is exceeded, or the offer is manifestly insufficient. The increase runs from the date by which the time limit should have been met until actual payment. The financial effect is decisive: on large claims, the penalty can double or triple the amount at stake.

Yes. The purpose of dommages-ouvrage insurance, under Article L. 242-1 of the Insurance Code, is to finance the full cost of the works to repair damage of the kind for which builders are liable (our translation). The indemnity is intended to restore the building. Case law applies this rule strictly: a project owner who does not carry out the repairs risks a reduction of the indemnity to the actual cost of the necessary works.

This rule of application prevents DO insurance from becoming a means of enrichment and ensures that repair is effective. On resale without repair, the purchaser may benefit from the transfer of rights under the cover for the remaining period, and apply the funds to the repairs. The firm recommends keeping all supporting documents for expenses: contractors' invoices, accepted quotes, photographs before and after the works.

An expert assessment is a matter of right in the DO procedure. Annex II to Article A. 243-1 of the Insurance Code provides that the insurer appoints an expert to examine the defects and verify their ten-year character. The insured has the right to attend the operations, make observations and, if need be, be assisted by a technical expert of their choice.

The adversarial principle is fundamental. If the expert instructed by the insurer concludes that the defects are not of ten-year character and the insurer follows to refuse cover, the project owner can challenge this by having a court-appointed expert named in a pre-action urgent application (Article 145 CPC). Court-appointed expert assessment is the decisive tool in DO litigation: it classifies the defects objectively and conditions the outcome of the case. To go further, see the page on building expert assessment.

The main value of DO insurance appears in this situation. The project owner is compensated by the DO insurer without having to pursue an insolvent company. The DO insurer then turns, by subrogation, against the contractor's ten-year liability insurer (Article L. 124-3 et seq. of the Insurance Code). This mechanism makes DO insurance indispensable for any project carried out by fragile businesses.

Without DO insurance, the project owner must file a claim in the liquidation and attempt an action against the builder's insurer through the direct action (Article L. 124-3 of the Insurance Code). This route is longer, more complex, and exposes the owner to the risk of the ten-year limitation period expiring. The firm has developed particular experience in coordinating DO insurance with the judicial liquidation of a company. To go further, see the page on construction defects.

No, but it deprives the project owner of pre-financing and requires direct proceedings against the builders under Articles 1792 et seq. of the French Civil Code. A project owner who has not taken out the compulsory DO insurance is in breach of Article L. 242-1 of the Insurance Code but keeps the ten-year liability action.

The absence of DO insurance becomes a particular problem on resale. An informed purchaser may refuse to buy, demand a significant discount, or bring a latent defects claim against the seller. The notary records the absence of DO insurance in the notarial deed. Regularisation after the fact is generally impossible (the insurance does not cover completed works). In practice, the absence of DO insurance jams property transactions and reduces the liquidity of the property.

Yes, it is in fact the architecture of the system. The DO insurer that has paid the indemnity is subrogated to the rights of its insured against the third parties responsible, under Article L. 121-12 of the Insurance Code. It pursues the contractor's ten-year liability insurer, the builder itself, the project manager, the engineering firm or any party whose liability may be engaged.

This subrogation explains the division of tasks in the construction insurance market: DO insurance bears the pre-financing risk, while ten-year liability cover (RC décennale or CNR) bears the actual repair as between insurers. The project owner is thus removed from the disputes between builders: compensation is quick, and the insurer brings the recourse action. The time limit for the subrogation action follows that of the rights and actions of the insured in which the insurer is subrogated, under Article L. 121-12 of the Insurance Code.

The Paris judicial court has jurisdiction over DO disputes where the building is located in Paris. The rule of territorial jurisdiction in insurance matters follows the insurer's registered office, but in real property matters and for urgent applications for expert assessment, the court of the place where the building is located is preferred.

For works in the inner suburbs, the judicial courts of Bobigny, Créteil, Nanterre or Versailles may have jurisdiction depending on the municipality. The firm, based at 11 rue Margueritte 75017 Paris, regularly appears before these courts and coordinates court-appointed expert assessments throughout the jurisdiction of the Paris court of appeal. Command of the L. 242-1 time limits and procedural rigour determine the outcome of the case.

Not necessarily, but the added value is clear as soon as a serious amount is at stake. The claim is the act that triggers the L. 242-1 time limits. A badly drafted letter, an approximate classification or a missing document can weaken the case lastingly. The lawyer drafts the claim letter, legally classifying the defects, attaches the relevant supporting documents and builds the file as if it were to be brought before the judge.

Early intervention also allows the mandatory time limits to be monitored. If the insurer is slow to notify its position, the lawyer sends a formal notice triggering the double legal interest rate penalty. If the insurer refuses, the lawyer immediately launches the urgent application for an expert assessment (Article 145 CPC) to fix the defects judicially. On high-stakes projects, the investment in fees at the outset is generally recovered once the indemnity offer is made.

Article L. 242-1 of the Insurance Code refers to damage of the kind for which builders are liable within the meaning of Article 1792-1, manufacturers and importers or the technical inspector under Article 1792 of the Civil Code (our translation). DO insurance therefore follows the scope of the ten-year liability: defects that compromise the structural soundness of the building or make it unfit for its purpose.

In a judgment of 28 February 2018 (No. 17-13.478, Bull, FS-P+B+R+I), the Third Civil Chamber held that because of their modest scale, without incorporation of new materials into the building, the works, which amounted to a limited repair pending the inevitable complete renewal of a manifestly dilapidated roof, did not constitute a component of the building (our translation) within the meaning of Article 1792. Classification as a building is therefore decisive. To go further, see the page on ten-year builder's liability.