Ordering insurance for public authorities : an often overlooked pitfall

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Publié le 11/07/2024 par Jérôme Goy

INSURANCE LAW

Public sector insurance: a frequent pitfall to avoid

Article R113-10 of the French Insurance Code provides for the termination of a contract, including during the term of a public procurement contract, in the event of a claim. The current high level of tension in the local authority insurance market is leading to an increase in the number of cases where local authority insurance policies are terminated due to claims. Article R113-10 of the French Insurance Code is, by default, included by insurers in the contractual terms and conditions they offer. While it is necessary, according to case law, for this option to be included in the contractual terms and conditions specific to the public procurement contract (1), it is common practice in the insurance contracts of major companies to exclude it. We can therefore only recommend that local authorities include the same provision when awarding public insurance contracts, especially as these are multi-year contracts.