The tender notice runs to fifteen pages, the insurance section to three lines, and it is precisely those three lines that are impossible: the notice asks for a copy of the liability insurance policy to be submitted with the tender, sets the limit at several times the estimated value, demands cover until the end of the warranty period, and expects the subcontractors to be insured as well. As a broker, I see contractors in this situation choosing between two bad options: either they take out and pay for cover before winning the tender, cover they may never need, or they do not bid. Yet there is a third way. On 12 February 2026 the Council operating within the Public Procurement Authority issued guidance on construction insurance which states that several typical excessive demands may not be imposed, and Act CXLIII of 2015 on Public Procurement (Kbt., the Public Procurement Act) gives the tenderer three tools to have the notice put right before the deadline expires. This article is not about what the contracting authority may require – that is covered in the article on public procurement insurance requirements – but about what the tenderer can do if a requirement goes beyond that.
- According to the construction insurance guidance issued on 12 February 2026 by the Council operating within the Public Procurement Authority, the contracting authority may not require liability insurance to be in place during the tendering period, may not prescribe cover for defects liability or warranty obligations, and may not ask subcontractors for liability insurance.
- The guidance derives the proportionality of the sum insured from Section 65(3) of the Kbt. (Public Procurement Act): suitability requirements may be imposed at most to the extent actually necessary for performing the contract.
- The tenderer's three tools in chronological order: a request for additional information, preliminary dispute resolution before the tender deadline, and a request for review before the Public Procurement Arbitration Board – all three are subject to deadlines, so the insurance section of the notice must be read in the first few days.
What does the guidance say about the four typical excessive demands?
The guidance is clear on four points. First, the contracting authority “may not require a general liability insurance contract to be in place during the tendering period” – insurance can be required from the winning tenderer, as of the date the contract is concluded, just as Section 26 of Government Decree 322/2015 (X. 30.) on the detailed rules of public procurement for construction investments ties the liability insurance requirement to the winning tenderer and the date of contract conclusion, with the amount and scope specified in the notice initiating the procedure. Second, in specifying the liability insurance, “cover for defects liability or an obligation relating to warranty may not be prescribed” – warranty and warranty security are contractual matters that the contracting authority may stipulate within the framework of the Kbt., but not as part of the liability insurance – the maintenance-period extension of CAR (contractors' all risks) insurance is an existing product, but not as a public procurement suitability requirement or a contractual insurance requirement. Third, the contracting authority “may not require the conclusion of a liability insurance contract” from the subcontractors to be involved in performance. Fourth, the guidance derives the proportionality of the sum insured from Section 65(3) of the Kbt., under which suitability requirements must be limited to the subject matter of the procurement and may be imposed “at most to the extent of the conditions actually necessary for performing the contract” – a limit several times the estimated value is hard to reconcile with this. The guidance is not legislation, but it is the Authority's official position, which the tenderer can cite when challenging the notice.
First tool: requesting additional information
The simplest step, and the one that takes effect soonest, is a question. Under Section 56 of the Kbt., an economic operator may request additional information in writing about the content of the procurement documents, and the contracting authority sends the answer to all tenderers – within a time limit laid down in the Act and linked to the tender deadline. The wording of the question is decisive: rather than asking whether the policy is “really required”, it is worth pointing out the contradiction and requesting clarification with reference to the guidance. For example: “The notice requires the liability insurance policy to be attached to the tender. In view of the Public Procurement Authority's guidance of 12 February 2026 and Section 26 of Government Decree 322/2015, please confirm that the winning tenderer must prove that liability insurance is in place as of the date of contract conclusion.” The basis of the limit (“is the sum insured aligned with the net contract value?”), the cover requested for the warranty period and the subcontractor requirement can be queried in the same way. As a broker, I see many contracting authorities amend the notice in response to such a question, because by answering they themselves take on a risk. It is worth asking the question in the first few days after the notice is published, because given the deadline for answers, the contracting authority is not obliged to answer a late question – the tender checklist also includes this step with dates.
Second tool: preliminary dispute resolution
If no answer comes or the answer maintains the requirement, the next step is preliminary dispute resolution under Section 80 of the Kbt. Any interested economic operator objecting to unlawful content in the procurement documents can initiate it before the tender deadline expires, up to the time limit set by the Act – under the current rule, up to the tenth day before the deadline – and the contracting authority must reply to the request in writing within a short time limit counted in working days. The request must specify the contested requirement, the legal provision infringed – typically Section 65(3) of the Kbt. and Section 26 of Government Decree 322/2015 – and the proposed amendment. Preliminary dispute resolution is free of charge and does not require legal representation, and if the contracting authority accepts the request, it amends the notice and, where necessary, also extends the tender deadline. If it rejects the request, the reasoning of its reply may later serve as the basis for a request for review. Importantly, initiating dispute resolution does not preclude submitting a tender: the company can prepare its tender in parallel.
Third tool: a request for review before the Public Procurement Arbitration Board
The strongest, and also the most expensive, tool is a request for review under Section 148 of the Kbt., filed with the Public Procurement Arbitration Board. The request must be submitted within a short time limit – as a general rule, fifteen days – from the date of becoming aware of the infringement; for unlawful content in the notice and the procurement documents, the Act specifically defines what is to be regarded as the date of becoming aware, so the deadline must always be calculated for the specific notice. The procedure is subject to an administrative service fee, and the Arbitration Board may establish the infringement, annul the notice or the document, and impose obligations on the contracting authority. This is the territory of a public procurement expert or a lawyer – as a broker, I do not act in such proceedings, but on the professional insurance questions – what the contractors' liability insurance available on the market contains, what the requested limit means, and why warranty cover cannot be taken out as liability insurance – if you let me know, I help where I can. Before it gets this far, it is worth weighing up proportionality: in a smaller tender the cost and time of a review are often out of proportion to what is at stake, and many contracting authorities already amend the notice in response to the question or the dispute resolution.
What can you do on the insurance side in the meantime?
As long as the notice does not change, the company has to decide whether to bid under the current conditions. If the notice requires proof at the tendering stage, a widespread solution in Hungarian practice is a letter of intent from the insurer: the insurer confirms in writing that, if the company wins, it will issue cover of the amount and scope specified in the notice for the conclusion of the contract – this is not a policy, and contracting authorities treat it differently, but you can ask in a request for additional information whether it will be accepted. If the limit is unrealistically high, it is worth finding out from the insurer in advance whether it will provide cover for that amount at all, and with what deductible; if it will not, that in itself is an argument in the dispute resolution. Where cover is requested for the warranty period, it needs to be clarified whether the contracting authority actually wants a CAR maintenance-period extension, a warranty security or liability insurance – these are three different products, and only the last one can be required as liability insurance, and even then only from the winning tenderer. The article on proof of insurance describes the types of proof and how to obtain them. The tenderer's tasks in chronological order: read the insurance section on the day the notice is published; in the first few days, ask the clarification question with reference to the guidance; in parallel, clarify with the insurer whether the requested cover is available; if the answer does not resolve the issue, initiate dispute resolution before the deadline; and only after that, with an expert, decide on a request for review. If you let me know, I review the insurance sections of the notice and help where I can in obtaining the letter of intent or the proof of insurance; the procedural steps of the public procurement and compliance with the deadlines remain the task of the company and its public procurement adviser.
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Sources
- Guidance of the Council operating within the Public Procurement Authority (Közbeszerzési Hatóság) on construction insurance (12 February 2026) – liability insurance may not be required at the tendering stage; defects liability/warranty cover may not be prescribed; it may not be required from subcontractors; proportionality under Section 65(3) of the Kbt.
- Public Procurement Act (Kbt.) – Act CXLIII of 2015 on Public Procurement: Section 56 (additional information), Section 65(3) (proportionality of suitability requirements), Section 80 (preliminary dispute resolution), Section 148 (request for review)
- Government Decree 322/2015 (X. 30.) on the detailed rules of public procurement for construction investments and related design and engineering services – Section 26 (liability insurance from the winning tenderer as of the date of contract conclusion)
