Ten-Year Posthumous Indemnity Policy – Analysis of Insurance Conditions: Effectiveness, Effect, and Duration of the Guarantee

The ten-year posthumous indemnity policy is mandatory for all companies involved in construction or renovation projects of buildings associated with the Superbonus 110% scheme. It is certainly important to understand well under what conditions the ten-year posthumous insurance is provided, so as to understand its limits and when it can be stipulated.

Likewise, it is essential to understand when the ten-year posthumous guarantee starts and ends so as not to fall into false expectations. In this article, we try to explain these aspects well, which are similar to almost all insurance policy contracts for Ten-Year Posthumous Indemnity.

Effectiveness of the Guarantee The Ten-Year Posthumous Insurance Policy is provided under the following essential conditions for the effectiveness of the guarantee:

• that the Building has been constructed according to the rules of art by the builder, using the best construction technique, in full compliance with laws and regulations in force or norms set by official bodies, and in conformity with the specifications attached to the preliminary sale agreement;
• that the buildings themselves are used and intended according to the project and as declared in the Policy Technical Sheet;
• that all the tests required by law have been carried out with favorable results;
• that the Contractor has submitted the following documents (which form an integral part of the Policy and must be attached to the Insurance Contract): the Static Testing, with a positive outcome and without reservations or, alternatively, the occupancy certificate issued by the Public Administration; favorable technical reports, prepared by a Technical Controller, if explicitly called for extensions to the basic guarantee. (Attention: our company collaborates with companies that overcome this obstacle, do not perform the Technical Control, but present the Static Testing or the Occupancy Certificate of the Public Administration)

You must be careful, because if even one of the above conditions is not met, the guarantee or extensions of it, are not operative.

Mandatory Posthumous Decennial: for whom?

 According to Italian law, under Article 4 of Legislative Decree No. 122 of June 20, 2005, regarding the protection of the financial rights of buyers of buildings under construction, the builder must necessarily obtain a ten-year posthumous policy before selling the property. This makes the ten-year posthumous policy mandatory by law.

The builder or the person in charge of the works must stipulate this guarantee, which lasts for ten years from the date of completion of the works, and the beneficiary of the policy is the buyer of the property.

Effect and Duration of the Guarantee The Ten-Year Posthumous Indemnity Policy is stipulated for the duration and with the commencement date set in the Technical Sheet, usually the cover of the Policy.

The Insurance takes effect from 24:00 on the date resulting from the certificate of completion of the works. The Policy will not be operative in case of non-payment of the entire Premium. The Premium must be paid to the insurance intermediary to whom the Policy is assigned or to the Company, you should NOT pay to other subjects, they are not authorized, you risk losing your money.

The guarantee will end on the expiration date set in the Policy and in any case not later than ten years from the completion of the works, except as provided for extensions of the guarantee “Waterproofing of Coverings”, “Flooring and Internal Coatings”, and “Plasters and Internal Coatings”, if explicitly called for.

Who pays for the ten-year posthumous policy?

The ten-year posthumous policy, or ten-year insurance, is generally paid by the construction company or the real estate developer. This happens because it is their responsibility to ensure that the building is constructed without defects that could cause significant problems in the future. In some cases, even the architect or engineer who designed the building can be involved in paying the policy, depending on local laws and specific contractual clauses. In some jurisdictions, such as in France, the law requires that the builder take out such insurance to protect the buyer from any structural defects. In other places, it may be a common practice or a contractual agreement between the parties involved.

After the sale of the property, the beneficiary of the coverage becomes the new owner, who is protected for any structural defects that manifest in the ten years following the completion of the building. This transfer of beneficiary occurs without the new owner having to pay additional insurance premiums.

What does posthumous guarantee mean?

The term “posthumous guarantee” refers to a warranty or insurance that comes into effect after the completion of a job or the delivery of a product and remains valid for a set period. This term is commonly used in the construction sector and mainly concerns the quality and safety of built buildings. In the construction context, a posthumous guarantee typically refers to an insurance policy that covers structural defects or serious construction problems that emerge after the building’s delivery.

Here are some key points

• Duration:The posthumous guarantee often has a duration of 10 years, which is why it is sometimes called “decennial insurance.” This period is considered adequate to identify any significant construction defects.
• Coverage: Includes significant structural defects, waterproofing problems, and other serious construction defects that may compromise the safety or habitability of the building.
• Beneficiaries: The beneficiaries of this guarantee are generally the building’s owners, who can change over time. If a property is sold, the guarantee is transferred to the new owner.
• Mandatory: In some countries, like France, this guarantee is mandatory by law for all new buildings. In other countries, however, it may be a recommended practice or required by specific contractual agreements. The posthumous guarantee provides important protection for property owners, ensuring that any serious defects emerging after construction are adequately addressed without further significant costs to them.
•  The ten-year posthumous policy in brief: Ten-Year Posthumous Policy: A mandatory insurance for the builder of a property, for the benefit of the buyer or assignee, to cover any construction defects and damages to third parties.
• Duration and Legislation: Coverage for ten years from the date of completion of the work, based on Article 4 of Legislative Decree 122/2005 and art. 1669 of the civil code.
• Responsibility and Ruin: Concerns the contractor’s liability for total or partial ruin of the property or serious construction defects due to soil defects or construction defects, with a complaint within one year of discovery.
• Obligations and Beneficiaries: The builder must stipulate the policy and deliver it to the buyer at the time of the transfer of ownership. The beneficiary is the private buyer, not companies or collective entities. What It Covers: Damages from total or partial ruin, serious construction defects, damages caused by soil defects or construction defects that manifested after the conclusion of the contract. Features and Options: Check the clauses and coverage for damages