The cable is in the ground. Some sections have been switched into service on a live rail network, but there has been no final acceptance. Overnight, thieves cut out several hundred meters of copper. The question for the construction company is immediate: who pays to replace it?
The contractor may have no practical control over the cable. It serves the employer, and access may require a track possession granted by a third party. Yet, under the risk allocation discussed here, the contractor bears the risk of loss until the works are formally taken over—even without fault and even when a third party commits the theft. The CAR/EAR policy the contractor paid for may meanwhile have stopped covering the cable when it entered service.
This is not a remote scenario. Polish Police reports describe one investigation involving 18 offenses, more than 30 metric tons of copper and losses exceeding PLN 1.1 million, as well as another involving about 1,200 meters of cable and losses of PLN 220,000 (Police report on railway infrastructure theft). At two construction sites, thieves took several hundred meters of copper cable and several thousand meters of overhead contact line, worth PLN 450,000 in total (Police report on large-scale copper theft). Copper theft from a linear construction project in Poland is a normal, foreseeable risk—not force majeure. That is why infrastructure contracts require it to be insured.
The central issue is the gap between the period of contractual risk and the period of insurance cover. On a phased project, that gap can last months.
The terms that determine who pays
Polish construction contracts may use Civil Code acceptance procedures or FIDIC-based procedures modified by particular conditions. These terms should not be treated as interchangeable.
| Term | Meaning | Why it matters |
|---|---|---|
| Remuneration risk | Under Article 647 of the Polish Civil Code, the contractor must deliver the completed facility. If an incorporated component is stolen, it must be reinstated for the agreed remuneration, regardless of fault. | The immediate cost is performing the same work twice for one payment, rather than necessarily paying damages. |
| Taking-Over Certificate | The document confirming formal taking over by the employer under FIDIC Sub-Clause 10.1. | Under the FIDIC arrangement discussed here, it marks the transfer of risk of loss. |
| CAR/EAR policy | Contractors’ All Risks or Erection All Risks insurance. | Cover should run from contract signing until taking over, but the policy may end cover for an individual component sooner. |
| Temporary use | A contractual arrangement allowing the employer to use part of the works before formally taking them over. | In the arrangements discussed below, it does not transfer the risk of loss or start the defects notification period. |
| Waiver of subrogation | The insurer waives its right of recourse against specified parties, relevant to Article 828 § 1 of the Civil Code. | Without it, an insurer that pays the main contractor may pursue the subcontractor. |
Why theft can remain the contractor’s risk
The obligation to deliver, not simply liability for fault
The contractor’s exposure does not depend solely on whether it failed to prevent the theft. Article 647 of the Civil Code concerns its obligation to deliver the completed facility: if a cable incorporated into the works disappears before the relevant handover, the contractor may have to reinstate it for the same remuneration.
Article 652 addresses the contractor’s responsibility for damage on a construction site that it has formally taken over until the facility is handed over (Polish Supreme Court, I CSK 1907/25). In case IV CSK 368/14, which involved the theft of a power cable, the Supreme Court confirmed that a contract may expressly require the contractor to protect completed work until acceptance (Polish Supreme Court, IV CSK 368/14).
Three arguments commonly raised by contract teams do not, on their own, resolve that exposure:
| Argument | Why it does not remove the risk |
|---|---|
| “A third party committed a crime, so this is force majeure.” | Copper theft on a linear project is a normal, foreseeable event. Article 471 of the Civil Code presumes the debtor’s liability; the contractor must establish that it exercised due care. |
| “The cable belongs to the network operator, not us.” | Ownership and risk of loss are different questions. The definition of the contractual works does not depend on who holds title to the cable. |
| “We invoiced for this section and the employer paid.” | Interim payment does not transfer risk. Nor, by itself, does completion, notice of readiness for acceptance, commissioning, physical incorporation or transfer of title to materials. |
Identify the contractual handover event
The decisive step is taking over under the applicable contract procedure:
- Under the FIDIC model discussed here: a final acceptance record and a Taking-Over Certificate under Sub-Clause 10.1.
- Under the Civil Code model discussed here: the acceptance record itself.
A FIDIC mechanism also deserves close attention. If the engineer does not respond within the period for issuing a Taking-Over Certificate—typically 28 days from the application—the certificate is deemed issued on the last day of that period. Risk can therefore pass without an express decision from the other party.
If the employer refuses acceptance without justification, the contractor may also invoke creditor’s delay under Article 486 § 2 of the Civil Code and the employer’s duty to cooperate under Article 354 § 2. It may argue that risk passed when acceptance should have occurred.
Temporary use: the employer operates the asset, but may not take the risk
Standard FIDIC Sub-Clause 10.2 links the employer’s use of part of the works with taking it over. Polish infrastructure contracts can modify that position. The model Particular Conditions published on gov.pl amend Sub-Clause 10.2 to provide for temporary use.
The Polish National Appeals Chamber (Krajowa Izba Odwoławcza, or KIO), which hears public procurement appeals, addressed this arrangement in two rulings:
- KIO 1121/16, July 21, 2016: FIDIC Sub-Clause 10.2 permits temporary use and a contractual separation of the associated risks (ruling).
- KIO 235/22, February 21, 2022: temporary use of a section does not start the defects notification period.
Under the temporary-use arrangement described in the source contracts, the employer can use the section and assume the costs of ordinary wear and tear and maintenance. But temporary use does not constitute taking over, produce a Taking-Over Certificate, transfer care of the works or start the defects notification period. The contractor continues to bear the risk of loss—even if access to a live rail section depends on a track possession granted by someone else.
Theft is not ordinary wear and tear. Vandalism is not maintenance. Operational control and contractual risk can therefore sit with different parties.
Contact us if you need to establish whether your Polish contract contains a temporary-use clause and how it allocates these risks.
The insurance gap: when cover ends before risk does
Compare the two end dates
If the contractor cannot realistically transfer theft risk before formal taking over, the critical protection is CAR/EAR insurance arranged for the benefit of another party under Article 808 § 1 of the Civil Code. Its cover should last as long as the contractor’s contractual risk—from contract signing through the Taking-Over Certificate.
A costly mismatch arises when the main contractor’s CAR policy excludes damage to property placed into operation and ends cover for a component when it begins operating. Materials from the Polish Financial Supervision Authority indicate that EAR policies generally do not cover buildings and structures during normal operation (KNF examination materials).
| Contractual position | Insurance position |
|---|---|
| The contractor bears risk until the Taking-Over Certificate. | Cover for the component ends when it is switched into service or handed over for operation. |
| Formal taking over may be weeks or months away. | During that interval, the relevant loss may be uninsured. |
That is not merely a problem for one theft. If the exclusion applies to each section placed into operation, the same ground for refusal may recur throughout the project.
Paying a premium does not establish cover
A subcontractor may bear the insurance premium through a percentage surcharge on its package price. On a large project, the amount can reach hundreds of thousands of zlotys. If the policy excludes the operating sections for which the subcontractor still bears risk, the subcontractor has paid for protection it did not receive. That mismatch is a substantial argument in a dispute.
FIDIC Sub-Clause 18.1 provides a more direct route where it applies: a party that fails to obtain or maintain available, required insurance must pay the amounts that should have been recoverable under it (FIDIC Red Book 2017, Polish edition). The general basis for a damages claim is Article 471 together with Article 361 § 2 of the Civil Code, covering actual loss and lost profits within the limits of normal causation (Polish Supreme Court, I CSK 389/18).
The amount is not automatically the policy limit. It is the benefit the insurer would actually have paid under a compliant policy, after applicable deductibles and exclusions.
Check who is insured—and who the insurer can pursue
An insured subcontractor can claim directly from the insurer under Article 808 § 3 of the Civil Code, without relying on the main contractor to act (Civil Code text, ISAP). Whether the subcontractor is included as an insured must therefore be checked in the policy.
The reverse risk matters too. Without a waiver of subrogation, an insurer that compensates the main contractor may pursue the subcontractor under Article 828 § 1. A policy nominally intended to protect subcontractors can be seriously deficient if it leaves that recourse open.
What to negotiate before signing
The best time to close the risk and insurance gap is before signing the contract or agreeing to bear the premium.
| Action | Purpose |
|---|---|
| Define the exact risk-transfer event, such as “upon issuance of the Taking-Over Certificate for the section,” rather than “after acceptance.” | Several types of acceptance may occur; vague wording invites a dispute over which one matters. |
| Divide the works into sections and secure the right to seek a separate Taking-Over Certificate for each. | Section-by-section taking over can shorten the risk period without requiring a fresh agreement to change the allocation. |
| Check for a temporary-use clause and, if present, negotiate transfer of at least theft and loss risk during that use. | Otherwise, the contractor may retain risk for an asset it cannot access. |
| Obtain the complete CAR/EAR policy, general terms and conditions, and schedule of additional clauses before signing. | The policy cannot be meaningfully checked without the clauses containing its extensions and exclusions. |
| Compare the policy with every contractual insurance requirement: all-risks scope, reinstatement value, duration, theft of incorporated components, sections placed into operation, sublimits and deductibles. | Identify both periods and types of loss for which contractual risk remains but cover does not. |
| Require the subcontractor to be included as an insured and obtain a waiver of subrogation covering the contractor and subcontractors. | Preserve direct access to the insurer and address recourse after payment. |
| Specify and price measurable security measures: fencing, lighting, guards, monitoring and patrol frequency. | A defined standard gives the contractor concrete obligations and evidence of compliance. |
| Make the subcontract symmetrical: if main-contract obligations are passed down, pass down the corresponding rights too. | The subcontract should not import care-of-the-works obligations while omitting rights linked to insuring those works. |
Security deserves particular attention. Article 22(1) of the Polish Construction Law requires the construction manager to secure the site “adequately,” but does not set a minimum number of patrols or prescribe monitoring or physical guards (Construction Law text, ISAP). Leaving the standard undefined does not necessarily help the contractor; it leaves room for an open-ended allegation that security was inadequate.
On public procurement contracts, Article 433(3) of the Public Procurement Law prohibits clauses making a contractor liable for circumstances for which the employer bears sole responsibility. The KIO treated clauses shifting the consequences of employer errors onto contractors as abusive in cases KIO 2644/23 and KIO 314/22 (Public Procurement Office commentary). That protection does not apply to a subcontract that is not itself a public procurement contract.
What to document during the project
- Apply for Taking-Over Certificates by section as soon as the relevant works permit it, and track the engineer’s response period. A deemed certificate may determine when risk passed.
- Keep regular photographs of progress and security arrangements, with dates and geolocation. Build the record before an incident, not afterward.
- Document requests for stronger security and the other party’s response. If a measure is treated as a variation, that supports the argument that it was outside the original scope.
- Use separate correspondence for different assets. Distinguish incidents involving existing infrastructure, whose reinstatement is additional work under the source’s analysis, from losses to your own works.
- Separate emergency reinstatement from the permanent solution. Replacing a stolen cable with better technology without seeking a variation instruction can leave you performing the upgrade without additional payment and weaken your later position.
The first 24 hours after a theft—and the following week
| When | Action |
|---|---|
| Immediately | Report the theft to the Polish Police yourself. Obtain written confirmation and a case number; do not rely on assurances from the network operator, user or security provider. |
| Immediately | Photograph the damage and security conditions with dates and geolocation. |
| Within 24 hours | Prepare an inspection record with a representative of the other contracting party. |
| Within 24 hours | Record the section’s status: Was it operating? Was it under temporary use? Had a Taking-Over Certificate been issued? These facts determine the risk and insurance arguments. |
| Within 24 hours | Send a written demand, not an informal request, for the insured loss to be reported to the insurer. Identify the cover extensions required by the contract. |
| Within seven days | Verify that the insurer actually received the claim; obtain the claim number and loss adjuster’s details. |
| Within seven days | If the party responsible for insurance has not reported the loss, reserve in writing a claim for the value of the insurance payment not obtained and consider a direct claim under Article 808 § 3 of the Civil Code. |
A Police report is particularly important for a theft claim. An assurance that the network user or security provider made one may be wrong, and a missing report can result in refusal without a substantive review.
Keep that issue distinct from late notice to the insurer. Under Article 818 § 3 of the Civil Code, missing a notification deadline in the insurance terms permits the insurer to reduce payment only if the delay prevented it from establishing the circumstances or extent of the loss. Failure to report the theft to the Police presents a different problem.
The same timing problem in IT equipment projects
The underlying distinction between installation and acceptance is not unique to construction. An IT implementation contract can leave a supplier exposed if equipment is delivered, installed and put into use at a customer’s premises before formal acceptance. Article 471 of the Civil Code is a general basis for contractual liability relevant to both construction and implementation contracts (Civil Code text, ISAP).
Placing equipment at the customer’s site does not, by itself, decide when risk passes—just as incorporating a cable into a duct does not. Define delivery, installation, commissioning and acceptance separately, and state the risk-transfer event.
Where remuneration is a lump sum, Article 632 § 1 of the Civil Code generally prevents a contractor from demanding more because its costs increased. Section 2 allows an application to the court for an increase or termination where an unforeseeable change in circumstances threatens a gross loss. The source’s position is that theft on a linear construction project does not satisfy the unforeseeability requirement (Polish Supreme Court, II CSK 21/12).
Audit the contract and policy together
The practical audit question is simple: does insurance cover continue for as long as the contractor bears the contractual risk?
Linear projects make a mismatch especially consequential. They can extend across many kilometers that cannot all be physically guarded, incorporate material with a high scrap value, and place sections into service long before final acceptance. Review the risk-transfer clauses and the complete CAR/EAR wording before signing and before accepting the insurance charge. An operating-property exclusion may affect every later theft, not just the first.
If you need support comparing a Polish contract with its policy, reviewing temporary use or negotiating section-by-section taking over and balanced subcontract rights, contact us.
Frequently asked questions
The cable is live and we cannot access it. Why might theft still be our risk?
Under the temporary-use arrangement discussed above, use by the employer is not formal taking over. It does not issue a Taking-Over Certificate, transfer care of the works or start the defects notification period. The employer bears ordinary wear-and-tear and maintenance costs; theft is neither. Risk passes at the contractual taking-over event.
The employer has paid our interim invoice. Has risk passed?
No. Interim payment, completion, notice of readiness, commissioning, physical installation and transfer of ownership do not by themselves amount to taking over. Under the FIDIC model discussed here, check for the acceptance record and Taking-Over Certificate.
Can a subcontractor claim from the insurer directly?
Yes, under Article 808 § 3 of the Civil Code, if the subcontractor is an insured under the policy. Check the actual insured-party wording rather than assuming that a contribution to the premium establishes insured status.
What matters most immediately after a theft?
Make and document your own Police report; photograph the scene; arrange an inspection record; establish whether the section was operating, under temporary use or formally taken over; and demand written notification to the insurer. Then verify the claim number and adjuster’s details.
Does the absence of a contractual monitoring requirement help the contractor?
Not necessarily. Polish Construction Law requires “adequate” site security without prescribing detailed minimum measures. A priced, measurable contractual standard gives the contractor clearer obligations and a record against which its performance can be assessed.
Does partial acceptance under Article 654 of the Civil Code transfer risk?
Article 654 gives a contractor a right to request partial acceptance against partial payment, but it is a default rule that the parties may exclude. In the FIDIC arrangements discussed here, partial acceptance or interim payment alone does not transfer risk. Negotiate identifiable sections and seek a Taking-Over Certificate for each one.
