The rule applying to service providers
The official sources consulted state a clear rule for liberal-profession providers. The cover must extend to Luxembourg territory.
The provider must hold professional indemnity insurance covering their activity and that of their employees.
Where the policy taken out in the country of origin does not cover the entirety of the statutory and contractual liability incurred in Luxembourg, the provider must adapt their insurance or take out specific cover.
Two distinct notions appear here: statutory liability, arising from the law, and contractual liability, arising from the contract concluded.
A policy may cover one without covering the other, and the wording requires the entirety of both.
The burden of checking falls on the provider, not on their insurer or their client.
| Dimension to check | Question to ask | Effect if inadequate |
|---|---|---|
| Territorial scope | Does the policy cover Luxembourg | No cover |
| Material scope | Are the activities carried on covered | Exclusion of cover |
| Sums insured | Are they suited to the project | Partial cover |
The three dimensions to check
They are cumulative.
Territorial scope. Does the policy cover works carried out in Luxembourg, and not only in the country of establishment.
Material scope. Does the policy cover the entirety of the statutory and contractual liability incurred in Luxembourg, including the post-handover guarantee regimes.
The sum insured. Is the limit appropriate to the value of the works concerned.
The second dimension is the hardest to check, since it means comparing a foreign liability regime with a Luxembourg one.
A territorial extension therefore is not enough: covering Luxembourg geographically does not mean covering the liabilities incurred there.
The solution where cover falls short
Two routes, stated by the official sources. They allow insufficient cover to be regularised.
Adapt the existing insurance, by extension or endorsement with the home insurer.
Take out specific cover for the activity in Luxembourg.
The choice between them is for the insurer and broker, and depends on how often the firm works there.
A firm working regularly in Luxembourg is better served by settling this question once, rather than project by project.
When to check
A decisive point of method.
Checking must take place before the bid is submitted, not before work starts.
Adapting a policy has a cost, which must appear in the price.
A firm discovering the shortfall after being appointed bears that cost out of its margin, with no way of passing it on.
This reasoning mirrors that applying to the mandatory rules, set out in the corresponding article: cost elements linked to cross-border work are checked at the pricing stage.
What to ask your insurer
Four precise questions, to be put in writing. They are addressed to the insurer before the work starts.
Does my policy cover works carried out in Luxembourg.
Does it cover the entirety of statutory liability incurred in Luxembourg, including post-handover guarantees.
Does it cover contractual liability arising from contracts concluded in Luxembourg.
Is the sum insured appropriate to the value of the works concerned.
A written answer is what protects, an oral confirmation having no value in the event of a claim.
What this means for a professional
Four rules.
Check before pricing, adaptation having a cost.
Distinguish territorial from material cover, the first not standing for the second.
Obtain written confirmation from the insurer, expressly addressing Luxembourg.
Settle the question globally where you work there regularly, rather than project by project.
This article reflects the rules at the date of checking and serves professional orientation. It does not constitute insurance advice.