In a recent 2025 ruling, the Council of State (the “CS”) clarified that, for an insured party covered under a performance bond to claim compensation for loss of opportunity, it is necessary to prove both the amount of the loss and the occurrence of actual damage.
A public entity, as the insured under a performance bond, filed a lawsuit against a contractor attorney and the insurance company that issued the bond. The public entity alleged a loss of opportunity because the contractor attorney failed to file the necessary actions to recover public funds. According to the entity, this omission prevented it from obtaining reimbursement of those funds.
The court of first instance denied the claim for compensation against the insurer, a decision that was appealed by the entity. The CS resolved the appeal and acquitted the insurer based on the following considerations:
1. Indemnity nature of insurance
The mere breach of contract by the contractor does not, by itself, entitle the insured to claim compensation. To do so, it is necessary to prove that such a breach occurred and that it caused specific, quantifiable damage covered by the insurance. If no real harm is caused to the insured’s asset, there is no right to claim compensation.
2. Loss of opportunity is compensable if three requirements are met
(i) Real opportunity: it must be proven that there was a serious and well-founded possibility of obtaining the expected benefit;
(ii) Definitive loss of the right: it is required that this opportunity was lost irreversibly, for example, due to the expiration of the actions that were to be exercised, and
(iii) Probability of success: it must be demonstrated that the claim had reasonable grounds to succeed, even without the contractor’s omission.
In this specific case, the CS concluded that the entity did not prove either the existence of a real opportunity or the definitive loss of the right. The damage resulting from the actions not carried out by the contractor attorney were not demonstrated. In the absence of these elements, there was no certain damage that could be claimed to the insurer.
3. Burden of proof on the insured
It was up to the insured to prove that a real opportunity existed and that it was definitively lost.
In this case, the CS reiterated that it was the duty of the state entity to provide evidence of the probability of success of the actions that were not exercised, the willful or grossly negligent conduct of the officials, and the occurrence of the expiration of the actions. By failing to meet this burden, neither the amount nor the occurrence of the loss was proven.
Based on the above, the CS reaffirmed that, in the context of performance bonds, the contractor’s breach is not sufficient for the insured to obtain the right to compensation. It is necessary to prove the amount and occurrence of the loss, even when claiming compensation for the loss of opportunity.
Lucas Fajardo Gutiérrez | Partner of the Insurance and Reinsurance Team
Daniel Delgado Jaramillo | Associate of the Insurance and Reinsurance Team
Luis Alejandro Peña | Associate of the Insurance and Reinsurance Team
Brigard Urrutia
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