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Compulsory Professional Liability Insurance for Designers and Contractors in Hungary

Compulsory Professional Liability Insurance for Designers and Contractors in Hungary

Hungary
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A Government decree has been published recently on the compulsory professional liability insurance of designers and contractors relating to the construction of buildings under 300 sqm subject to simple notification.

Under the Government decree, the construction and the design contract shall contain, as an obligatory element, a declaration of the contractor or the designer stating that he has or will have the necessary professional liability insurance at the time of handover of the work site at the latest. According to the new rules, as long as the contractor does not provide the professional liability insurance, the construction work site shall not be handed over to the contractor, the construction log-book shall not be opened and the construction shall not be commenced. 

The Government decree amends the competence of the construction supervisory authority, which now checks or may check whether the designer or the contractor has the necessary professional liability insurance. Failing to obtain such insurance shall be considered as a serious infringement, and in this case, the authority may prohibit continuing the construction activities. The Government decree also determines in detail the damages that shall be covered by the professional liability insurance, the insurance amount and the period of maintaining the insurance policy. The new rules will enter into force on 1 January 2017. 

By Eszter Kamocsay-Berta, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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