Since 15 January 2025, the vast majority of contractors may work only with valid liability insurance – this is required by Section 21/B of Government Decree 191/2009 (IX. 15.) on building construction activities. Many people still know the old rule linked to the simplified notification procedure for building a home, yet the new obligation is much broader: it concerns not a single project but the company's entire activity, and it is linked to the chamber register. As a broker, I see the questions revolving around two points: what exactly has to be certified, and whether this replaces the CAR (contractors' all risks) policy taken out for a project. This article sets out the picture based on the text of the decree, the guidance of the MKIK (Hungarian Chamber of Commerce and Industry) and the 2026 guidance of the Public Procurement Authority.
- Under Section 21/B of Government Decree 191/2009 (IX. 15.), every contractor has been obliged to take out liability insurance since 15 January 2025 – state construction investments are governed by a separate decree (Government Decree 55/2025).
- The minimum sum insured is tied to the band of annual net income, from HUF 20/40 million to HUF 200/400 million (per event / per year); the certificate of cover must be uploaded to the chamber's registration system, and the insurer reports the termination of the policy to the MKIK (Hungarian Chamber of Commerce and Industry) within 15 days.
- Compulsory liability insurance operates at company level and concerns damage caused to third parties – it does not protect the works under construction, the materials or the site compound; that remains the job of the CAR/EAR policy taken out for the project.
Who does it apply to – and who not?
Under Section 21/B(1) of the decree, “the contractor is obliged to conclude a liability insurance contract for the compensation of damage caused in the course of the construction activities it undertakes”. The MKIK guidance also defines the scope by activity codes: for business entities TEÁOR’25 (the Hungarian classification of economic activities) 41.00–43.99 (except 43.60), for sole traders ÖVTJ’25 (the sole traders' activity code list) 410001–439906 (except 436001). In practice this means everyone listed in the chamber register as a contractor – from the general contractor to the tiler, including those working as subcontractors. Under Section 12(1a) of the decree, a contractor may undertake only work for which it holds compulsory contractor's liability insurance, and Section 12(2) lists maintaining the insurance among the contractor's duties.
There are two important exceptions. State construction investments are subject not to this general obligation but to the separate project cover under Government Decree 55/2025 (III. 26.), which is tied to the construction cost budget – when assigning the band, Decree 191/2009 even deducts the part of annual net income derived from state construction investments, while the general obligation still applies to the company's other work (I write about this in the public procurement article). And the decree does not apply to a private individual building for their own use rather than as a business – their risks are handled by home insurance and by their contractor's cover, as I summarised in the article on the compulsory insurances for building a home.
What must it cover, and for what amount?
Under Section 21/C, the insurance must provide cover for personal injury and property damage caused in connection with breaches of the professional requirements and rules applicable to construction activities and of the provisions of the construction contract, as well as for the related grievance award (sérelemdíj, compensation for non-pecuniary harm) – that is, for what the contractor is liable to compensate. It must also extend to damage arising from the activities of employees and subcontractors. Section 21/D sets the minimum sum insured in five bands based on annual net income (per event / per year):
- up to HUF 100 million: HUF 20 million / HUF 40 million;
- between HUF 100 and 500 million: HUF 50 million / HUF 100 million;
- between HUF 500 million and HUF 2 billion: HUF 100 million / HUF 200 million;
- between HUF 2 and 10 billion: HUF 150 million / HUF 300 million;
- above HUF 10 billion: HUF 200 million / HUF 400 million.
The decree recognises both open-ended contracts and project-based, fixed-term contracts. It is important that these are minimums: the client may require more in the construction contract, and in the lowest band a larger loss can quickly exhaust the HUF 20 million limit. The other frequently misunderstood point: compulsory insurance does not pay for everything either. The insurer pays only for what is an insured event under the contract – according to the Public Procurement Authority's guidance, remedying defects in the contractor's own work (warranty, liability for defects) is not a liability insurance loss, and neither are contractual penalties or fines.
Certification and checks: chamber, contract, insurer
The certificate of cover is issued by the insurer, and the contractor must upload it to the MKIK's chamber registration system; for a new registration, it must be submitted together with the application and must not be older than 30 days (Section 21/F). According to the MKIK guidance, there is no need to report again if the contract is open-ended and has not changed; a report is, however, compulsory when a fixed term expires, when changing insurer, when the contract is amended and when revenue moves into another band – the chamber's guidance notes mention an 8-day deadline for this. The chamber checks at least once a year that the insurance is in place (Section 21/G), and the insurer reports the termination of the contract to the MKIK within 15 days (Section 21/F). If there is no valid cover, the chamber prohibits the activity until a contract is concluded, for up to six months, and if the gap is not remedied within that time either, it removes the contractor from the register (Section 21/G and Section 37(1)(c)).
On the client's side, the decree provides a simple checkpoint: under Section 3(2)(r), the construction contract must contain the policy number of the compulsory contractor's liability insurance and the insurer's name and contact details – or the contractor's declaration that it will hold the insurance by the handover of the construction site at the latest – and under the decree the policy is an annex to the contract if it is available when the contract is signed. If neither appears in the contract, that in itself raises a question.
What changed in January 2026?
Government Decree 448/2025 (XII. 29.) – most of whose provisions entered into force on 14 January 2026 – amended several construction-related decrees. In Decree 191/2009, the required content of the construction contract was extended (for subcontracts, the registration number of the ordering contractor), and certified translations of contracts not written in Hungarian must also be uploaded to the e-construction log (e-építési napló) – according to the guidance of the ÉKM (Ministry of Construction and Transport), this rule applies to contracts concluded after 1 April 2026. The substantive change to the liability insurance rules affects designers: according to the ÉKM guidance, from 14 January 2026 designers' insurance is tied to the design activity (Government Decree 266/2013, Sections 15/F and 15/H). The amendment did not rewrite Sections 21/B–21/G on compulsory contractor's insurance – it is worth checking the text in force on njt.hu every time, as the regulation keeps changing.
So where does CAR fit in?
The two covers answer different questions. Compulsory liability insurance is company-level and continuous, and it concerns damage caused to third parties: the cracked neighbouring wall, the injured passer-by, the severed utility line. CAR/EAR is tied to a project, and its core is Section I: the works under construction, the incorporated materials, the work performed, the temporary works – whatever a storm, a fire or a theft takes away. Compulsory insurance does not protect this, as I described in detail in the article on the relationship between contractor's liability insurance and CAR. Section II of CAR, however, is itself liability cover, so in the case of damage to a neighbour both policies may in principle be affected – which one pays first is decided by the “other insurance” clause in the policy conditions, and this varies from insurer to insurer. The article on the two sections of CAR provides a map of this.
A frequent question is whether the liability section of a project CAR policy on its own meets the requirements of Section 21/C – grievance award, extension to subcontractors, banded limits, a certificate of cover that can be uploaded to the chamber system. This depends on the insurer's product and on the wording of the certificate; it is worth clarifying this with the insurer before the policy is taken out, not afterwards during the chamber's check – if you let me know, I help with this. In any case, it is worth looking at the company's risks together: compulsory insurance, project cover and the protection of machinery and the team come together as a whole in a portfolio.
What should you do now?
Check which band your net income for the previous year falls into, and whether the certificate of cover in the chamber system matches that band. Check whether your construction contracts contain the policy number and the insurer's name. If you change insurer, move into a different revenue band or a fixed term expires, uploading the new certificate is your responsibility – neither the insurer nor the broker takes this over. For your projects, check separately whether there is a CAR policy and who is insured under it. If you let me know before the renewal date or before a new project, I prepare the comparison of quotes and the paperwork.
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Sources
- Government Decree 191/2009 (IX. 15.) on building construction activities (Sections 3, 12, 21/B–21/G, 37)
- MKIK (Hungarian Chamber of Commerce and Industry) guidance on compulsory contractor's liability insurance
- Építési jog (construction law portal): Everything there is to know about the compulsory liability insurance of contractors (updated 31 March 2025)
- Government Decree 448/2025 (XII. 29.) amending certain government decrees on construction and spatial planning
- ÉKM (Ministry of Construction and Transport) information on the amendment of construction-related government decrees (MÉK – Hungarian Chamber of Architects, 8 January 2026)
- Government Decree 55/2025 (III. 26.) on liability insurance for state construction investments
- Public Procurement Authority (Közbeszerzési Hatóság): Construction insurance – guidance (2026-02-12)
