Insurability of circular construction and circular buildings

SECO Belgium examines major barrier in circular construction sector

The construction industry is characterized by mechanisms that (re)allocate the risks of projects between contractors, building owners, designers, producers and insurers. These mechanisms are related to (1) legislation on responsibilities and (2) technical guarantees.

Within this known structure, the different parties can and dare assume their roles and together they achieve realizations. But it is precisely this structure that is shaky in circular construction. Building owners, for example, will think twice if it turns out that the decennial policy (the policy that, after delivery of the building, insures you for 10 years against damage that falls under the 10-year liability) only applies to new buildings, building components and products. In short, there is great uncertainty today about the insurability of circular construction and circular buildings. And that is one of the main barriers for the construction industry to actually take steps in this transition.

Together with a group of frontrunners from the construction and insurance sectors, technical control agency SECO Belgium wants to explore this barrier, and delve into the possibilities of overcoming it. SECO Belgium's ambitions are clear:
- to draw up a general framework with clear guidelines and recommendations for insurers, the construction sector and regulators;
- to further develop the role of information and documentation in depth. After all, the lack of reliable information in circular building practices hampers the budgeting of the technical risks related to circular building and consequently the chances of insurability. After all, insurers do not like to take incalculable risks.

The participatory process with committed stakeholders from different disciplines, in addition to a supported solution, should also provide end products that are usable for the sector (regulators, policy makers, the construction industry and their insurers).