Environmental regulation 2020: towards a reform of construction insurance?

A wish to build more sustainably

Each new construction has had to comply with a certain level of energy performance since 2005. The first energy regulations (Thermal Regulation 2005 and TR 2012) are now set to evolve with the entry into force of the ER2020, scheduled for January 2022 in France, to mitigate energy losses and contribute to the preservation of the environment. Decarbonisation of consumption and construction itself, introduction of criteria to limit summer overheating, limitation of energy consumption by differentiating between renewable and non-renewable energy… This regulation will impose new standards in order to propose more environmentally friendly buildings with better control of energy expenditure and a reduction in the average energy consumption per inhabitant.

An obvious impact on construction insurance in France

Today, the ER2020 bill is a legislative framework with evolving parameters. Initially, this will apply to new construction of housing, offices, and primary and secondary education buildings. Insurers will be careful to ensure that the legal aspects are specified in order to measure the consequences in terms of insurance. Indeed, the thresholds not to be exceeded are not yet determined and will certainly evolve over time. As a result, how will builders work to understand and assess energy performance? What impact will these new regulatory standards have on professional insurance contracts and on the ten-year guarantee?

To illustrate, the installation of photovoltaic panels increases the risk of fire and the complexity of the technical solutions also increases the technological risk. Just as the legislation remains to be clarified, the impacts and pathologies are mostly unknown. Only case law will determine to what extent discomfort above the defined threshold will be considered unfit for purpose.

Even more technical construction loss adjustment

As a result of this new regulation, adjusters will have to specialise even more in a framework that is still imprecise and leaves room for an assessment of the measures. In fact, new regulatory standards are being imposed on builders, potentially leading to a change in insurance cover. For the expert, this is a completely new legal and technical framework to take into account. The latter must ensure a new appreciation of future pathologies and claims based on his experience and knowledge. A real revolution is taking place here: it is necessary to have specialists who are increasingly qualified in passive construction materials in order to determine the cause of a loss and to devise new solutions for adequate repairs.

As these subjects are complex to grasp, with real difficulties in accessing information years after the construction work has been completed, specialists will have to demonstrate, in addition to the technical skills required, training in these new standards in order to remain competent in the latest developments. Moreover, the beginning of the implementation of the ER2020 will subject the assessment to a wider range of interpretations and rules of thumb. For example, if a building subject to a certain level of energy performance does not meet this measure, who will be at fault?

Highly anticipated in the world of construction, the ER2020 will bring its share of changes from a legislative point of view and certainly on the insurance side (Ten-Year Civil Liability, Damage to the building structure, etc.), resulting in case law. A fortiori, if energy passivity becomes a criterion of destination of the work, it is a total upheaval of the decennial insurance system that is announced.

Paul Wolters 

Head of Construction Sectors 

Stelliant group 

Erik Milhomme  

Director of Construction – High stakes and specialities 

Stelliant group