At the heart of this framework is a legal obligation that holds architects, contractors, and engineers accountable for structural defects in a building for up to 10 years after its completion. The liability typically covers defects that may lead to partial or total collapse or threaten the structural integrity of the building. It provides a charter to ensure that any major faults discovered within the first decade are rectified, providing peace of mind to property owners and developers.

While decennial liability exists throughout the Gulf region, its implementation varies. Saudi Arabia is the only country in the GCC with strict legal builder’s liability and compulsory decennial insurance. The Kingdom was also the first GCC nation to mandate Inherent Defects Insurance (IDI) for private construction projects in 2018, solidifying its leadership in this area of construction risk management.

Other countries with strict legal builder’s liability but without compulsory decennial insurance include the UAE, Kuwait, Qatar, and Bahrain. In these countries, although the liability exists, IDI remains an optional choice for developers, leaving some potential gaps in long-term risk coverage for property owners.

In Bahrain, the liability period is currently specified at five years rather than ten, meaning it is not fully decennial. However, there are plans to extend this period to 10 years to match the rest of the GCC, in line with regional efforts to ensure long-term project security.

Who is liable?

A common question developers ask is who exactly bears the responsibility under decennial liability. In most GCC countries, both contractors and architects are jointly liable for structural issues, which include failures in design, materials, or workmanship. However, in Saudi Arabia, the applicable insurance coverage is IDI, where the liability is solely on contractors, excluding architects or designers. While this liability primarily falls on the main contractor and design professionals, engineers and subcontractors may also share responsibility depending on their involvement in the project.

Impact on developers and contractors

With such high stakes, decennial liability has prompted developers and contractors to adopt stricter risk management practices. The threat of hefty legal and financial consequences for non-compliance motivates all parties to ensure better project oversight, ensuring that design and construction processes are executed to the highest standards. This results in a legal framework that protects property owners while incentivizing builders to prioritize quality from the outset.

The role of Inherent Defects Insurance

To help manage the financial risks associated with decennial liability, many developers turn to IDI. Unlike other forms of insurance, IDI provides coverage for damage caused by structural defects discovered after the building is completed, without the need to establish fault. This form of insurance has become an essential component of large construction projects in the GCC, particularly in Saudi Arabia, where it is mandated by law, and in other countries where it is voluntarily adopted by developers.

These legal protections are not just theoretical. Several mega-projects in the GCC have been impacted by decennial liability claims, highlighting the importance of this legal framework. In one instance, several villas within a development experienced severe wall and frame cracks after completion, as well as fluctuating groundwater levels caused by seasonal rains. The damage ultimately required the evacuation and re-housing of residents. In another case, foundational defects were discovered five years after the completion of a luxury high-rise, resulting in a substantial payout. Such cases illustrate the financial risks developers face without robust insurance solutions.

Challenges in compliance

While decennial liability laws offer vital protection, they also present challenges. The complex nature of mega-projects, involving multiple stakeholders and subcontractors, makes compliance difficult. Ensuring that everyone involved in the project adheres to the required standards demands constant oversight and collaboration between legal teams, developers, and insurers.

As the GCC continues to grow its portfolio of ambitious construction projects, decennial liability will play an increasingly important role. With heightened focus on sustainability, safety, and quality, developers are increasingly turning to insurance brokers for expert guidance and support. Given the varying application of insurance regulations across different GCC countries, navigating these complexities has become essential for ensuring compliance and mitigating risk.

The construction industry in the GCC is renowned for its large-scale, high-profile projects that transform city skylines and fuel economic growth. Beneath the impressive infrastructure lies a crucial legal safeguard that ensures the longevity and safety of these structures—decennial liability. Adding a decade-long layer of accountability, this legal framework helps shape the way developers, contractors, and architects approach project execution in the region.

At the heart of this framework is a legal obligation that holds architects, contractors, and engineers accountable for structural defects in a building for up to 10 years after its completion. The liability typically covers defects that may lead to partial or total collapse or threaten the structural integrity of the building. It provides a charter to ensure that any major faults discovered within the first decade are rectified, providing peace of mind to property owners and developers.

While decennial liability exists throughout the Gulf region, its implementation varies. Saudi Arabia is the only country in the GCC with strict legal builder’s liability and compulsory decennial insurance. The Kingdom was also the first GCC nation to mandate Inherent Defects Insurance (IDI) for private construction projects in 2018, solidifying its leadership in this area of construction risk management.

Other countries with strict legal builder’s liability but without compulsory decennial insurance include the UAE, Kuwait, Qatar, and Bahrain. In these countries, although the liability exists, IDI remains an optional choice for developers, leaving some potential gaps in long-term risk coverage for property owners.

In Bahrain, the liability period is currently specified at five years rather than ten, meaning it is not fully decennial. However, there are plans to extend this period to 10 years to match the rest of the GCC, in line with regional efforts to ensure long-term project security.

Who is liable?

A common question developers ask is who exactly bears the responsibility under decennial liability. In most GCC countries, both contractors and architects are jointly liable for structural issues, which include failures in design, materials, or workmanship. However, in Saudi Arabia, the applicable insurance coverage is IDI, where the liability is solely on contractors, excluding architects or designers. While this liability primarily falls on the main contractor and design professionals, engineers and subcontractors may also share responsibility depending on their involvement in the project.

Impact on developers and contractors

With such high stakes, decennial liability has prompted developers and contractors to adopt stricter risk management practices. The threat of hefty legal and financial consequences for non-compliance motivates all parties to ensure better project oversight, ensuring that design and construction processes are executed to the highest standards. This results in a legal framework that protects property owners while incentivizing builders to prioritize quality from the outset.

The role of Inherent Defects Insurance

To help manage the financial risks associated with decennial liability, many developers turn to IDI. Unlike other forms of insurance, IDI provides coverage for damage caused by structural defects discovered after the building is completed, without the need to establish fault. This form of insurance has become an essential component of large construction projects in the GCC, particularly in Saudi Arabia, where it is mandated by law, and in other countries where it is voluntarily adopted by developers.

These legal protections are not just theoretical. Several mega-projects in the GCC have been impacted by decennial liability claims, highlighting the importance of this legal framework. In one instance, several villas within a development experienced severe wall and frame cracks after completion, as well as fluctuating groundwater levels caused by seasonal rains. The damage ultimately required the evacuation and re-housing of residents. In another case, foundational defects were discovered five years after the completion of a luxury high-rise, resulting in a substantial payout. Such cases illustrate the financial risks developers face without robust insurance solutions.

Challenges in compliance

While decennial liability laws offer vital protection, they also present challenges. The complex nature of mega-projects, involving multiple stakeholders and subcontractors, makes compliance difficult. Ensuring that everyone involved in the project adheres to the required standards demands constant oversight and collaboration between legal teams, developers, and insurers.

As the GCC continues to grow its portfolio of ambitious construction projects, decennial liability will play an increasingly important role. With heightened focus on sustainability, safety, and quality, developers are increasingly turning to insurance brokers for expert guidance and support. Given the varying application of insurance regulations across different GCC countries, navigating these complexities has become essential for ensuring compliance and mitigating risk.