Decennial insurance glossary

Terms: A and B

• Abandono de recurso (waiver of recourse). Optional guarantee, for an additional premium, under which the insurer waives its right to claim against the designated building agents (main contractor, design architect, works director or construction execution director) when it pays a covered claim, except in the event of an intentional act, wilful misconduct, breach of contract or fraud.
• Acta de recepción (handover certificate). Document recording the handover of the works. It must be signed at least by the developer and the contractor, and set out in writing the parties involved, the date of the final completion certificate for the works (or for the complete, finished phase), the final material execution cost and the declaration of acceptance with or without reservations. If there are reservations, they must be described objectively together with the deadline for remedying the defects.
• Asegurado (insured). The natural or legal person who holds the insured interest, to whom the rights deriving from the contract belong and who, in the absence of the policyholder, assumes its obligations. In decennial insurance, this is the developer until the building is handed over and, thereafter, the successive buyers.
• Asegurador (insurer). The entity that assumes the risk covered by the insurance contract in exchange for the premium.
• Beneficiario (beneficiary). The natural or legal person entitled to the compensation, as designated by the policyholder and subject to assignment by the insured.
• Bienes preexistentes (existing property). Real estate belonging to the insured that already existed before construction began, described in the Specific Conditions, on which (or on part of which) the insured works are carried out. This is common in refurbishments and renovations, and protecting it requires a supplementary guarantee.

Terms: C and D

• Caso fortuito y fuerza mayor (fortuitous event and force majeure). An event beyond anyone’s control that is unforeseeable or, even if foreseen, unavoidable, and that is the direct cause of the damage. The damage it causes is excluded from decennial insurance.
• Control técnico (technical control). Inspection and monitoring of the construction process carried out by the Technical Control Body from the start of the works until handover and, if necessary, afterwards as well.
• Daño material (material damage). Deterioration or destruction of the insured property, that is, of the building described in the Specific Conditions of the policy.
• Declaración de valor definitivo (declaration of final value). The policyholder’s declaration of the final value of the insured property, sufficiently itemised, which is submitted on handover of the works, forms part of the policy and is used to set the sum insured.

Terms: E and F

• Edificación (building and external works). The whole formed by the building and the external works that remain attached to it, as defined in the design at the time of handover of the works.
• Edificio (building). The primary works, the secondary works, the fixed installations and the building’s own equipment, taken together, of the building or buildings described in the Specific Conditions.
• Franquicia (excess). An expressly agreed amount, as an absolute value or as a percentage of the sum insured, that is deducted from the compensation for each claim.

Terms: I and O

• Informe D0 (D0 report). The Technical Control Body’s first report on the project. Together with the insurance application, it makes up the pre-policy.
• Instalaciones fijas y equipamiento propio (fixed installations and building equipment). The elements making up the electrical, plumbing, gas, heating, air-conditioning, audiovisual, telephone, security, lift and goods lift installations, and any other machinery needed to use or service the building, with their appliances, ducts and conduits.
• Obra fundamental (primary works). Foundations, load-bearing elements, beams, floor slabs, load-bearing walls and other structural elements that contribute directly to the building’s mechanical resistance and stability. This is what the basic guarantee of decennial insurance protects.
• Obra secundaria (secondary works). Elements of the building that are not part of the primary works or of the fixed installations and building equipment, such as façade enclosures (supported façades, curtain walls, windows), roofs and ground-bearing slabs, finishes, flooring and tiling, fixed partitions, false ceilings, doors, and waterproofing and insulation.
• Organismo de Control Técnico (OCT, Technical Control Body). A body independent of the other agents involved in the works, engaged by the developer and accepted by the insurer, that carries out technical control for insurance purposes: it checks the design, the execution of the works and the material tests carried out by an accredited laboratory, without taking part in the construction. It reports to the developer and the insurer on anything that may affect the insurability of the risk, and inspects the works that remedy the reservations in the handover certificate and the repairs following a claim.

Terms: P

• Periodo de cobertura (period of cover). The time between the effective date and the expiry date of the policy, stated in the entry-into-cover endorsement. The effective date is the date on which the handover certificate is signed.
• Póliza (policy). The document containing the terms of the insurance contract: the Specific, Special and General Conditions, the entry-into-cover endorsement, any endorsements or appendices that supplement or amend it, and the insurance application.
• Pre-póliza (pre-policy). The document issued when the insurance is taken out before the works are finished, made up of the insurance application and the OCT’s D0 report. The premium on account is paid with it, but the covers are not yet in force.
• Prima (premium). The price of the insurance. The premium notice also includes the legally applicable surcharges and taxes. The provisional minimum premium results from applying the rate to the estimated sum insured, and the final premium from applying it to the declared sum insured; the latter is set in the entry-into-cover endorsement.
• Prima a cuenta (premium on account). The part of the premium paid when the pre-policy is formalised, if the insurance is taken out at the start of the works. The rest is paid with the entry-into-cover endorsement.

Terms: R

• Recepción de la obra (handover of the works). The act by which the contractor, once the works are finished, hands them over to the developer, who accepts them. It may be done with or without reservations and must cover the whole of the works or complete, finished phases of them.
• Regla proporcional (condition of average). Reduction of the compensation when the sum insured is lower than the value of the building on the date of the claim: the assessed damage is multiplied by the ratio between the sum insured and that value.
• Revalorización automática (automatic indexation). Supplementary guarantee under which the sum insured, and also the excess, increase each year by an agreed percentage, compounded, from handover of the works.
• Riesgos nominados (named perils). A type of insurance that only covers the risks expressly included in the contract, unlike all-risks insurance. Decennial insurance is named-perils insurance.

Terms: S

• Siniestro (claim). An event whose damaging consequences are covered, wholly or partly, by the policy’s guarantees and have become apparent during the period of cover. All the material damage arising from the same initial cause is considered a single claim and gives rise to a single compensation payment.
• Suma asegurada (sum insured). The amount set in the policy that is the maximum limit the insurer will pay for all items and for all claims combined during the period of cover. It is explained in detail in the guide on the sum insured in decennial insurance.
• Suplemento de entrada en cobertura (entry-into-cover endorsement). A document that forms part of the policy and sets its final terms: the period of cover, the final premium and the sum insured. Once it is issued, the insurance comes into force. The process is explained in the guide on how to take out decennial insurance.

Terms: T and U

• Tomador del seguro (policyholder). The natural or legal person who enters into the contract with the insurer and to whom the obligations arising from it belong, such as paying the premium or providing information, except those which by their nature must be fulfilled by the insured. In decennial insurance, this is usually the developer.
• Unidad registral (registry unit). The unit recorded in the Land Registry. In the event of a covered claim, the insured building is considered to be such a unit, formed by one or more properties that, before division into separate units, are entered in the Registry on their own with a single, separate registry entry.
• Urbanización (external works). Roads, outdoor car parks, sports and recreational facilities, landscaping, service networks and, in general, any other works and installations that are not part of the building itself.