Insurance for a home fit-out in Malta: who needs what

The Construction Sites Insurance Obligations Regulations are Legal Notice 38 of 2024, in force from 27 February 2024, and they apply to construction work started after that date. Two points of housekeeping, because the older numbering still circulates: this is not Legal Notice 72 of 2013. Project-based third-party cover in Malta dates back to the 2013 Avoidance of Damages to Third Parties rules, but the instrument that sets today's minimum limit is the 2024 one.

What it requires:

• Regulation 3. Every construction site must carry valid insurance against loss, damage, injury or death caused to any third party by the works or by the acts of the client, contractors, subcontractors and their employees. The third-party limit must be at least EUR 750,000, and the cover must be in place before the BCA grants clearance to commence. It must be kept in force until the perit issues the certificate of completion.
• Regulation 4. The minimum is a floor. Cover above it is to be determined by risk assessment. A terraced shell in a dense village core with party walls on both sides is not the same risk as a detached villa with a garden, and the limit should reflect that.
• Regulations 2 and 5. The client submits a declaration of insurance cover, issued by an authorised insurer, to the Building and Construction Authority, within the two weeks before works start. The policy must be governed by Maltese law and subject to the jurisdiction of the Maltese courts.
• Regulation 6. The client submits the completion certificate to the BCA within two weeks of completion of the structural and sealing works.

The jurisdiction clause is worth pausing on. A policy written elsewhere in the EU, in a language your neighbour's lawyer does not read, under a law the Maltese courts would have to be persuaded to apply, is not what the regulation asks for.

Does this catch an internal fit-out?

Honestly: the sources do not settle it. S.L. 623.11 is triggered by construction works and keys its timing to BCA clearance to commence. A fit-out that touches no structure, needs no clearance and never opens a site in the ordinary sense may sit outside the regime. Many fit-outs are not that pure — they involve chasing walls, removing a non-structural partition, scaffolding on a common part, hoisting material up a façade.

Treat this as a question to put to your perit, in writing, before you sign anything, and have the perit confirm the position with the BCA. The cost of asking is an email. The cost of being wrong is being the uninsured party when something falls on a parked car.

What the contractor must carry regardless

The Construction Industry Licensing Regulations (S.L. 623.09, Legal Notice 166 of 2023, since amended) impose a separate duty, on the contractor rather than on you:

• Regulation 4(3): a licence holder must ensure the works are covered by a valid policy against third-party loss, damage, injury or death caused by the contractor, its employees and others under its direction.
• Regulation 4(4): the licence holder must also hold insurance for damage at the place of work, including bodily harm to employees.

If there is no cover, the regulations make the contractor personally liable; where the contractor is a company, its directors, managers and principal officers are liable in solidum — each for the whole. That is a real sanction, but it is a sanction after the fact. It does not produce money if the company and its directors have none.

Note also what is absent: these regulations set no minimum sum insured. The Association of Insurance Brokers has pointed out that the first draft made insurance a precondition for holding the licence, while the final text kept an insurance duty "without any minimum limits". So "my contractor is licensed" tells you a policy should exist. It tells you nothing about its limit.

Contractors' All Risks, and why it is usually per project

In practice the S.L. 623.11 duty is normally met with a Contractors' All Risks policy, which combines cover for the works themselves with third-party liability. CAR is normally issued per project. Some contractors hold an annual CAR with a per-contract limit, and in that arrangement the client may be named as co-insured.

There is a live industry argument behind this. The Malta Insurance Association has said there is no annual policy covering all of a contractor's risks: cover is project-specific and underwritten on each project's details before works begin, and the MIA argued the legal notice should be amended so that insurance is obtained per project. The Association of Insurance Brokers takes the other side and backs annual CAR policies. You do not need to resolve the argument. You need to know which of the two shapes your contractor's policy actually has, because an annual policy with a per-contract limit may or may not have been extended to your contract.

The people working in your flat

Employers' liability insurance is not generally compulsory in Malta for all employers. The AIB, agreeing with the Sofia inquiry, has argued that it should be — which tells you plainly that it is not today, beyond the licensed-contractor duty in regulation 4(4).

For the self-employed tradespeople who do a lot of finishing work here, there is a state layer. Article 28 of the Social Security Act pays Injury Benefit to an insured person below retirement age injured by accident arising out of or in the course of employment or self-occupation, or suffering a listed occupational disease, where they are incapable of work within twelve months. Accidents at the usual place of work, and accidents while attempting a rescue at the workplace, are deemed to arise from the work. No benefit is paid for the first three days of each spell of incapacity.

That is a safety net for the worker's income. It is not liability cover, it does not pay your damages, and it does not decide who was at fault.

What to ask for before work starts

1. The policy, not a promise. Ask for the policy document and the insurer's certificate. Read the named insured, the third-party limit, the period of insurance and the description of the works.
2. Check the limit against EUR 750,000 and against the site. If you have contiguous neighbours, ask the perit whether the risk assessment under regulation 4 justifies more.
3. Check the dates. Cover must be in force before clearance to commence and stay in force until the perit's certificate of completion. A policy that lapses mid-project is a policy you do not have.
4. If the contractor holds an annual CAR, ask for written confirmation that your contract is within it, what the per-contract limit is, and whether you can be named co-insured.
5. Confirm Maltese law and Maltese jurisdiction on the face of the policy.
6. Diarise the two filings. The declaration to the BCA within the two weeks before works start, and the completion certificate within two weeks of completion of structural and sealing works. Both are yours as client, even if someone else prepares the paperwork.
7. Ask your perit whether your particular fit-out is caught by S.L. 623.11 at all, and get the answer in writing.

None of this is onerous once you know it exists. The failure mode is not malice; it is a client who assumed, as he would have at home, that insurance was somebody else's filing.