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Latent Defects Insurance
Latent Defects Insurance protects against the cost of repairing or restoring damage caused by an inherent defect in a structure. The insurance is available for new and recently constructed commercial and industrial buildings and provides cover for a 10 or 12 year term from the date of practical completion.
The insured can be the developer, owner, tenant or provider or financier (or any combination of these) - and the policy is freely assignable should interests change during the policy term.
The policy is:
- On a material damage first party basis (this means that our policy pays if damage occurs - there is no need to prove negligence against a third party)
- For a ten year period
- For damage caused by an inherent defect in design, materials or workmanship
- Based on full value sums insured with built-on inflation protection.
Features of the cover are:
- Can be a major benefit when negotiating a sale or letting. The policy can be assigned to any purchaser and will protect lessees taking on full repairing responsibilities
- Provides funds for repairs so that disruption is minimised
- Meets the insurance requirements being imposed by many financiers
- Provides cover for 10 or 12 years and is non-cancellable
- Can be beneficial when negotiating with contractors and the professional team
- Provides continuity irrespective of the solvency of the contractor or professional team.
The insurance enables you to recover:
- The cost of repairing damage
- The cost of remedial action to prevent imminent damage
- The cost of professional fees
- Costs of debris removal and site clearance
- Any extra cost of reinstatement to comply with public authority requirements
- The cost of removing contents of the building
- Any non-recoverable VAT payable in respect of any of the above arising from any inherent defect in the building structure.
The inherent defect must originate within the main structure of the building but the policy pays for damage to the whole of the building including non-structural elements and services.
Information required for a quotation
- Description of contract
Number/type of buildings, number of storeys, type of frame, cladding, flat or pitched roof.
- Contract value
Value of each building.
- Foundations
Piles, bases, slabs. If Piles, driven bored or augered.
- Number of basements
- Period of contract
Maintenance period. Phased handover? If so, what?
- Location of Contract
- Is Contract Design & Build?
If not, what?
- Name of consultants
- Anticipated start date
- Advise form of contract to be utilised
- Site plans
Site layout, cross sections.
Bore hole report if available.
- Site
Does site contain existing structures?
If so, describe existing structures. Are they to be demolished?
Please Note
This summary only provides brief details of typical cover provided under the policy. For precise policy, terms, conditions and exclusions please request a specimen policy document.
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