Demanding insurance of 3× your tender price is allowed — the '2× rule' from the directive only applies to turnover
The Belgian Council of State dismisses FALCO's appeal and confirms that a contracting authority may require bidders' professional liability insurance to cover at least 3× the tender amount — the proportionality rule that applies to minimum-turnover requirements (max 2× the estimated contract value) is not transposable to insurance guarantees.
What happened?
The social housing company Haute Senne Logement launched a tender in May 2016 for the renovation of 106 dwellings on 6 sites, divided into 5 lots (total estimate EUR 3,669,927.67). The specifications contained a striking selection requirement: each bidder had to provide professional liability insurance with a minimum guarantee per claim — covering bodily, material AND immaterial damage combined — of at least 3× the tender amount. For lot 2 'Façades & miscellaneous', three bids came in: HULLBRIDGE at EUR 990,155, THERET & FILS at EUR 1,036,223, and FALCO at EUR 956,779 (excl. VAT). FALCO was the lowest and was awarded the lot on 31 August 2016 for EUR 1,018,923 incl. VAT. Then came the supervisory authority — the Société wallonne du Logement. In an email of 19 September 2016, a civil servant pointed out that FALCO's insurance certificate only covered bodily and material damage; immaterial damage did not seem to be included. The project author asked FALCO for clarification, with strict instructions: 'no new certificates — otherwise it counts as regularisation'. FALCO replied with a certificate dated 4 October 2016 showing the policy covered EUR 2,500,000 for bodily + material + immaterial damage combined. Problem: 3× FALCO's tender = approximately EUR 2,870,000. The policy covered less than required. On 26 October 2016 the board of Haute Senne Logement took a second decision: lot 2 went to HULLBRIDGE for EUR 1,049,280 incl. VAT — almost EUR 30,000 more than FALCO's bid. FALCO only received both decisions late November. FALCO appealed to the Council of State on three grounds, the most fundamental concerning proportionality. FALCO referred to article 58.3 of Directive 2014/24/EU and recital 83, which expressly states that a turnover requirement 'as a rule shall not exceed twice the estimated value of the contract'. With a bid of around EUR 1 million, a 3× insurance requirement meant the policy needed to cover over EUR 3 million — almost the estimated value of the entire tender for all 5 lots combined. Manifestly disproportionate, FALCO argued. The Council of State does not follow that reasoning. Central consideration: 'An insurance coverage amount cannot be compared to a turnover figure realised.' The case law and directive rules FALCO invokes concern minimum turnover specifically — not insurance coverage. They are different things, even if both fall under economic and financial capacity. Moreover: FALCO did not show it was actually impossible to obtain such a guarantee — on the contrary, in her final memorial she regretted that the contracting authority had not given her a chance to submit a new certificate. And the winner HULLBRIDGE had been able to provide the required certificate from March 2016 onwards. Given the nature of the works (renovation of 106 dwellings) and the diversity of possible damage during execution, the Council did not find a 3× requirement manifestly unreasonable. The 'regularisation' argument was also rejected. A missing or insufficient selection certificate falls under article 59 of the Royal Decree of 15 July 2011 (selection examination), not article 96 §4 (regularisation of the bid itself). The contracting authority may request additional information to complete existing documents, but cannot allow a new certificate that 'repairs' the selection defect. The other two grounds (lack of motivation for the implicit withdrawal of the first award and incompetence of the board) were also rejected. FALCO was ordered to pay EUR 840 in procedural compensation and EUR 400 in other costs.
Why does this matter?
This judgment sharpens two important boundaries for anyone drafting or weighing selection criteria. First: the proportionality rule from the European directive — 'maximum 2× the estimated value' — applies only to minimum annual turnover, not to insurance guarantees. Anyone challenging a high insurance requirement by simply transposing the turnover rule misses the mark. For insurance, only the general proportionality assessment applies: in proportion to the nature, complexity and scope of the contract. Second: a missing or insufficient selection certificate cannot be 'fixed' by submitting a new certificate. Question-and-answer rounds under article 59 of the Royal Decree of 15 July 2011 serve to clarify or supplement existing documents — not to heal a fundamental selection defect. As bid manager: make sure your insurance certificates are fully compliant with what the specifications require from the moment of submission (all covered damage types literally listed, sufficient coverage amount), because you don't get a second chance.
The lesson
If as a bid manager you see an insurance requirement that seems higher than 'reasonable' to you — for example 3× the bid amount — first check whether the nature of the works justifies it (renovation, underground works, complex technical installations) before reaching for the directive standard for turnover. That standard does not apply to insurance. And check your policy line by line against the specifications: does it cover bodily, material AND immaterial damage? Up to what combined amount? A policy that says 'corporels et matériels' without explicitly mentioning 'immatériels' can disqualify you — and you won't get a second chance to submit an adapted certificate.
Ask yourself
Does the specification require a minimum coverage 'for bodily, material and immaterial damage combined'? Get out your insurance certificate. Are all three damage types literally mentioned? Does the guarantee amount to at least the requested multiple of your bid? If not: contact your insurer before submission — an additional certificate after opening cannot be submitted.
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →