Insurance Flash - May 2026

The Spanish Supreme Court clarifies the limitation periods for claims relating to ongoing damage: implications for insurance and reinsurance in Spain

The recent Spanish Supreme Court judgment of 24 February 2026 provides key guidance on the distinction between permanent and ongoing damage, as well as on the calculation of limitation periods in claims for property damage.

The case in question concerned damage to a building caused by persistent leaks and damp, allegedly resulting from works on an adjacent plot. The Court had to determine whether the damage should be considered permanent or ongoing in the context of a tort law claim, a fundamental distinction for establishing the start of the limitation period under Spanish law.

In line with established case law, the Court held that lasting or permanent damage is that which occurs at a specific point in time as a result of the defendant's conduct, but persists over time and may be exacerbated by factors unrelated to the initial act or omission. In such cases, the limitation period begins "from the moment the injured party became aware of it", that is, from the moment the affected person became aware of the damage and was able to assess its extent with reasonable certainty, which may require the involvement of an expert.

Conversely, in cases of ongoing or successive damage, the calculation of the limitation period does not commence until the final outcome has occurred, particularly where it is not possible to divide the series of damages into distinct stages. Case law recognises the practical difficulty of determining when this "final outcome" occurs, as it remains latent and linked to the original cause until it is properly rectified.

In this specific case, the Court upheld the decision of the Provincial Court, concluding that the claimants did not have the necessary factual and legal grounds to bring a claim until the expert report was drawn up, at which point they became aware of the true cause of the leaks and damp.

Implications for Property Damage, Energy, Construction and other insurance policies

This doctrine is particularly relevant to the insurance sector, as it highlights the importance of accurately assessing the nature of the damage, the date on which it was or could have been claimed, and the effective date of the claims. The judgment also notes that these criteria apply to civil liability claims under the Building Regulations Act (LOE), as well as to damage caused by pharmaceutical products, chronic illnesses and environmental damage.

Comment

The Supreme Court's judgment clarifies the criteria for determining the limitation period in cases of ongoing damage, which may give rise to late claims and affect the calculation of reserves and claims management, particularly in long-tail risks. Proof of knowledge of the damage will be particularly relevant, an issue that can often prove particularly complex. It is therefore advisable to bear in mind the importance of clear policy wording and robust investigation procedures, as well as the significance of the claimant's diligence and the possibility of late discovery of the damage.