The families of cover
Three distinct families, often confused.
Public liability, covering damage caused to third parties during professional activity.
Professional indemnity, covering damage arising from the activity itself, for example in connection with the project's administrative procedures.
Post-handover liabilities, ten-year and two-year, covered in the article on liability after handover.
These three families do not overlap, and a policy covering one does not necessarily cover the others.
| Family | What it covers | Character |
|---|---|---|
| Professional liability | Damage caused to third parties | Depends on the profession |
| Ten-year liability | Defects affecting the works | Depends on the applicable regime |
| Property insurance | Assets and the site | Contractual |
Liability and insurance are not the same thing
This is the fundamental distinction in this branch. A policy is not a liability, it covers one.
Liability arises from law and contract. It exists whether or not you are insured.
Insurance is a mechanism for financially covering that liability.
An uninsured firm therefore remains fully liable, and bears the consequences against its own assets.
Conversely, a firm insured in its home country may be liable in Luxembourg on a basis its policy does not cover.
That mismatch is the subject of the article on a foreign policy, and it is the single most important point in this guide in terms of financial risk.
What is compulsory and what is not
A point where international comparison misleads. A foreign policy does not necessarily cover a Luxembourg site.
Luxembourg professional sources indicate that every contractor must hold liability insurance covering damage caused to third parties during the works, and that this obligation is statutory.
The same sources indicate that ten-year and two-year insurance is not subject to the same statutory obligation.
This distinction is essential for a firm coming from a country where such insurance is compulsory: ten-year liability does exist in Luxembourg, but insuring it does not necessarily follow the same regime.
A firm may therefore be liable for ten years with no matching cover, which is a major exposure of its assets.
This point must be checked with an insurer established in Luxembourg, not inferred from national practice.
The trap of transposition
It works in both directions.
A firm from a country with compulsory insurance may assume it is covered by its usual policy, without checking its territorial and material scope.
A firm from a country with no equivalent may underestimate the extent of liability incurred in Luxembourg.
Both errors produce the same result: liability engaged without cover, long after the works have finished.
Checking must address three points: the territory covered, the nature of the liabilities covered, and the sum insured.
What this branch does not cover
Two subjects call for specialist advice.
Choosing a contract and its cover, which is for the insurer or broker.
Assessing a claim, which is for the law and for expert appraisal.
This guide identifies the questions to ask, it does not replace the answers of an insurance professional established in Luxembourg.
The articles in this branch
The article on a foreign policy covers checking cover. The checks are listed there.
The article on liability after handover covers the ten-year and two-year guarantees. The regimes are compared there.
The article on subcontracting covers the use of third parties. The obligations are set out there.
This article reflects practice and rules at the date of checking and serves professional orientation. It constitutes neither insurance nor legal advice.