Builder's legal protection - to do or not to do?

So first of all, thanks to everyone for your opinions and reports of experience!

The 3000 euros are a gamble. You can do it. Sometimes you lose, sometimes you win.

Exactly. That’s exactly our dilemma. Stupid that you can never foresee something like that.

What do you expect from the insurance?

Well basically what everyone expects from legal protection insurance. No nasty / hidden costs in case of emergency when you already have a super heavy financing / burden going on... 100,000 per case sounds like a lot, but just as an example: suppose in the worst case there’s a permanent construction stop, you’re paying off the loan and still paying rent, nobody agrees, etc. etc. A high coverage is reassuring.

How long is it valid? Only for the construction phase or also if hidden defects appear after 4 or x years?

It is valid at least 3, maximum 5 years. One thousand per year in our case.

I...and regret having pushed the otherwise good general contractor with a lawyer over just a 500€ damage instead of talking and claiming his right in the usual way. That still applies and also works

That’s exactly what we don’t intend to do. We’re not lawsuit fans at all and don’t want to become any. I believe in the good conversation face to face.
Our expert and our GC have known each other distantly from studying 20 years ago and from a few constructions the expert supervised. They’re not friends (and after meeting both, I guess why), but no enemies either. Our expert says things like “you can build with him” (he definitely advised against others) and “we both agree that we want to finish a reasonable building without defects and not be nitpickers.” That makes me hope that we might possibly handle crises through conversation.

However, if you know the contractor well as often described e.g. at Nordlys, he is from the town, has a good reputation etc., you can certainly do without it. If not: Read the insurance terms very carefully and take out something like that. 3-5k then is not much.

Our gut feeling has said yes from the start about the GC, and a big one at that. The man is an architect out of passion, has good ideas and enthusiasm for our project and was constantly reachable, committed and friendly even after signing. Sends me WhatsApp messages from BAU in Munich with roof tiles he wants to suggest, talks for an hour at 9 p.m. to explain things, still sends emails late that he promised etc. Also, I like his humor , but that is not decisive. He has been building single- and multi-family houses here in the area for 20 years, has a good reputation and something to lose. I believe he’s rather harmed by picky builders who at night walk through the shell with a laser measuring everything, initial each page of the contract and drag him to court if necessary. (We are honestly not like that. 3-5 cm I couldn’t care less about.) That’s what I heard. The construction won’t start before he’s back from vacation, the gravel for the foundation slab is compacted not by our garden landscaper but HIS structural builder even though more expensive etc.

Long story short. My gut somehow told me I can also sleep without the legal protection. I just wanted to make sure I’m not making a big mistake there. You helped me, thank you!

You don’t need that. The man is okay, as you describe him. Trust your judgment of character.

First of all, thanks to everyone for your opinions and experience reports!

Exactly. That is exactly our dilemma. It's unfortunate that you can never foresee something like this.

Basically, what everyone expects from legal protection. No nasty / hidden costs in case of an incident, when you already have a huge financing/burden running... 100,000 per case sounds like a lot, but just as an example: imagine in the worst case an eternal construction stop, you go into repayment and still pay rent, no one agrees, etc. etc. A high coverage is reassuring.

It is valid for at least 3, maximum 5 years. One thousand per year in our case.

That's exactly what we don't intend. We are by no means litigious and don't want to become so. I believe in a good face-to-face conversation. Our expert and our general contractor have known each other distantly from university 20 years ago and from a few buildings the expert supervised. They are not friends (and after meeting both, I suspect why), but also no enemies. Our expert says things like "you can build with him" (with others he definitely advised against it) and "we agree that we want to finish a decent building without defects and not nitpick." That gives me hope that we might be able to manage crises through conversation.

From the start, our gut said yes to the general contractor, a strong yes. The man is an architect by passion, has good ideas and is excited about our project and was constantly reachable, committed, and friendly even after signing. He sends me WhatsApp messages from the BAU in Munich with roof tiles he wants to suggest, talks on the phone for an hour at 9 pm to explain things, sends late emails he promised, etc. Also, I like his humor , but that's not decisive. He has been building single- and multi-family houses in the area for 20 years, has a good reputation and something to lose. I believe he has been more damaged by finicky builders who walk through the shell with a laser at night and measure everything, initial every page in the contract, and, if in doubt, drag him to court. (We're really not like that. 3-5 cm doesn't bother me at all.) That's what I heard. Construction will not start before he returns from vacation, the gravel for the foundation slab is not compacted by our landscape gardener but by HIS shell builder, even though more expensive, etc.

Long story short, my gut somehow told me I can sleep without legal protection. I just wanted to make sure I'm not making a gross mistake. You have helped me, thanks!

Sounds very reasonable and seems like a lucky hit, although your architect, like my architect, does not build the house but the trades.

You just need conscientious trades. For example, after the terrace windows were installed, I no longer had in mind that parts of the basement ceiling (between the exterior window and the perimeter insulation) are bare. So basically a prime cold bridge. The execution of the insulation was also not included in the offer. What happened? I come to the construction site and it’s done.

Unfortunately, you cannot talk to every craftsman, not even those who have a good reputation. We also had a legal dispute; we had no other choice. We would have liked to have legal protection since it was about a damage amount of around 50,000 euros. In the end, we won, but you never know that beforehand.

Statistically, every third new building nowadays has serious defects. The chance of needing a lawyer is therefore quite high.

Before I would ever hire a construction manager again, who costs a lot more money, I would rather take a good expert plus this insurance in case of doubt.

In my opinion, the package is overall more attractive, but it requires that you also deal with the subject matter yourself.

whereas your architect as well as my architect does not build the house, but the trades do.

Somehow yes, in a figurative sense. We have the general contractor solution. So his company builds our house, he and another employee are the construction managers. So of course, the bricklayers lay bricks, the plasterers plaster etc., but he is definitely closer than in your variant. Clearly, architect = contractor = construction manager is a huge potential for "oops, quick to make a botch" - so it really is a matter of trust somewhere. Plus involving the expert more closely than close.

That is perfectly fine and justifiably reasoned. If everything runs smoothly, you pat yourself on the shoulder; if there are problems, you bite the bullet—that's just how it is. There is hardly any opportunity on the market to get legal protection in the field of house construction, and this is precisely because it is simply too risky for the insurers, as from their perspective, the income/expense balance does not statistically add up. I am glad that through financing via the Sparkasse, there is an option here. This also makes sense for the bank if the construction project is completed without defects. If there were widely accessible legal protection like in the private sector, I am quite sure that many more builders would take it out.