As of January 15, 2025, contractors and planners in Hungary will be legally required to take out liability insurance in order to carry out their activities. Please ensure that you make the necessary arrangements in time.
The basis for calculating the premium for liability insurance for contractors and planners is the net turnover from the previous year, generated from construction and planning activities, minus the value of public investments (which are not subject to these regulations).
Liability insurance for contractors and architects covers damages caused to the client or third parties, including:
- Property damage, such as damage to tools, machinery, or buildings, as well as
- Personal injury
This also includes damage caused by:
- Employees
- Temporary workers, or
- Subcontractors
Regarding subcontractors, according to the regulation, all subcontractors involved in a contract must also be insured.
For contractors, insurance companies require the following information to assess the risk:
- Details of the business (it is important to provide these accurately to avoid excluding or leaving out important areas of coverage); and
- The annual net turnover associated with the relevant business.
Contractors must take out liability insurance starting from January 15, 2025. Architects are required to have professional liability insurance.
The basis for calculating premiums for the liability insurance of contractors and architects is the net turnover from the previous year from construction and architectural activities, minus the value of public investments (which are not subject to these regulations).
The following minimum coverage limits are legally required for contractor liability:
| Net income/turnover* of the previous year (less public investments) |
Minimum amounts for compensation |
|---|---|
| *Turnover < = HUF 100,000,000 | HUF 20,000,000/claim and HUF 40,000,000/year |
| HUF 100,000,000 < *Revenue < = HUF 500,000,000 | HUF 50,000,000/claim and HUF 100,000,000/year |
| HUF 500,000,000 < *turnover < = HUF 2,000,000,000 | HUF 100,000,000Ft/claim and HUF 200,000,000/year |
| HUF 2,000,000,000 < *turnover < = 10,000,000,000 | HUF 150,000,000Ft/claim and HUF 300,000,000/year |
| HUF 10,000,000,000 < *Revenue | HUF 200,000,000Ft/claim and HUF 400,000,000/year |
For planner liability, the following minimum coverage limits are legally required:
| Net income/turnover* of the previous year (less public investments) |
Minimum amounts for compensation |
|---|---|
| *Turnover < = HUF 20,000,000 | HUF 10,000,000Ft/claim and HUF 20,000,000Ft/year |
| HUF 20,000,000 <*Revenue < = HUF 100,000,000 | HUF 20,000,000/claim and HUF 40,000,000/year |
| HUF 100,000,000 <*Revenue < = HUF 1,000,000,000 | HUF 50,000,000Ft/claim and HUF 100,000,000Ft/year |
| HUF 1,000,000,000 < *Revenue | HUF 100,000,000/claim and HUF 200,000,000/year |
Supervision/Control
- For contractors, the existence of insurance will be monitored by the Hungarian Chamber of Commerce and Industry.
- For planners, the existence of insurance will be monitored by the Hungarian Chamber of Engineers and the Hungarian Chamber of Architects (Regional Chambers).
Failure to provide the insurance policy
- These authorities may impose sanctions (such as prohibition of activity, removal from the register, invalidation of the registration number).
- For companies engaged in both activities, the existence of both lines of insurance is required.
For further information, please contact us: info@trustrc.com