RC project owner:
secure your construction site and your third parties
A construction site creates risks… even if you are not building it yourself.
The project owner may be liable to third parties.
For an SME, the LPP is both a legal obligation and a lever for customer loyalty.
It directly influences your payroll, your HR policy and your ability to recruit.
A poorly calibrated solution can create additional costs, misunderstandings with staff, or coverage gaps between employee categories.
Conversely, a clear and appropriate structure protects the company, strengthens social stability and simplifies administration.
The risk is not only “insurance”: it is also budgetary, HR and governance.
Project owner's liability insurance: protecting SMEs against damages caused to third parties
The construction site is a project, and insurance should follow the same logic.
Project owner liability insurance is a liability insurance policy which aims to cover, according to the contract, the financial consequences of the project owner's liability towards third parties in the context of works.
It therefore concerns SMEs that commission a construction project, whether it involves new construction, renovation, fitting out, or technical work. Even though construction companies and their representatives (architects, engineers) have their own responsibilities and insurance, the project owner can be held liable, particularly regarding organizational issues, the selection of contractors, supervision, or site-related obligations.
In a dense urban environment like Geneva, interactions with neighbors, public roads and infrastructure amplify this risk.
What a project owner's liability insurance policy typically covers includes bodily injury and property damage caused to third parties in connection with the construction site, as well as defense costs, within contractual limits.
Typical claims include damage to neighbouring buildings (cracks, subsidence, vibrations), water or network damage, damage to third-party vehicles or property, and accidents involving passers-by or visitors to the construction site.
The coverage may include extensions depending on the type of work and contractual requirements, but these extensions must be specified: each construction site has its own risk profile.
The key areas of focus are exclusions, obligations, and coordination with other policies.
First, exclusions: certain risky work, certain undeclared activities, or progressive damages may be excluded or limited.
Purely contractual damages, penalties, or defects in work as such do not fall under the liability towards third parties.
Next, deductibles and sub-limits: these often vary depending on the damages, and they must be compatible with the project budget.
Thirdly, the insured's obligations: to properly announce the construction site, describe the perimeter, transmit plans and dates, respect safety measures (fencing, signage, access), and keep solid documentation.
In the event of a claim, the insurer generally expects certain documents: contracts, plans, minutes, site log, expert reports, and chronology.
Coordination is a major issue. The project owner must align the project owner's liability insurance with other construction insurances, in particular construction works insurance (which covers the work in progress), and with the liability insurance of the companies involved.
Without this coordination, costly duplication or, worse, grey areas are created. Another point is the relationship with the SME's business liability insurance, which does not necessarily cover a construction site under the same conditions.
Choosing the right level of coverage requires a simple decision-making framework.
Start by defining the site: type of work, environment (nearby neighborhood, public road), duration, budget, techniques (excavation, structural work, interventions on networks).
Next, identify the exposed third parties: neighbors, passers-by, businesses, infrastructure.
Then, calibrate the limits and deductibles in line with the plausible exposure, and check the requirements of the partners (bank, landlord, authority, companies).
A useful mini-list includes validating: scope and dates of the construction site, nature of the work declared, exclusions on risky activities, deductibles, coordination with works insurance and liability insurance of companies, and declaration procedure.
Mage & Associates can assist you with a site risk analysis, policy review, and contractual alignment. The goal is to obtain project owner's liability insurance tailored to your project, understandable to management, and effective in the event of a claim, without unnecessary complexity.
Trois risques majeurs pour le maître d’ouvrage
Those that most often trigger third-party claims.
Damage to neighbors and infrastructure
Cracks, leaks, vibrations, damage to networks: the works can affect third parties.
The project owner's liability insurance covers claims within contractual limits, often with strict requirements on site documentation and prevention measures.
Bodily harm
third parties
A passerby falls, accidents related to unsafe access, incidents around the construction site: these situations quickly become serious.
The coverage aims to protect the project owner against financial consequences and defense costs, according to the contract.
Recourse and cross-liability
On a construction site, several actors pass the buck.
Owner's liability insurance helps to handle defense and compensation, according to the contract, while allowing recourse between insurers, which prevents the SME from bearing the complexity alone.
Damage to a neighbor: the importance of construction site documentation
Realistic fictional example, based on a renovation project in Geneva.
Realistic fictional example. A Geneva-based SME renovates a building to house its offices.
The work involves drilling and intervention on pipes.
After a few weeks, a neighbor reported leaks and damage to a shared wall. The neighbor demanded immediate attention and threatened to hire a lawyer.
The SME, as project owner, declares the claim to its project owner liability insurer and transmits the documents: company contracts, plans, schedule, site reports and photos.
A key element is traceability: demonstrating preventive measures, inspections carried out, and the chronology of work. The insurer commissions an expert assessment to determine the cause and responsibilities.
In parallel, the SME coordinates with the construction company concerned and its liability insurer, because recourse is possible.
The resolution is done step by step: identification of the cause, drying measures, repair, then compensation according to the responsibilities retained and the contractual limits.
The SME avoids escalation through factual communication and structured management. A practical lesson: on a construction site, insurance matters, but documentation is just as important. A site log, evidence of preventative measures, and coordination with insurers save time and protect neighborly relations.
