Latent Defects Insurance

Helping to cover the cost of repairs to buildings

We arrange latent defects insurance to help cover the repair costs on residential, commercial and mixed-use developments.

Latent defects insurance can help to cover the cost of repairs or rebuilding if structural damage appears months or years after the practical completion a new-build or conversion project. Latent defects may be caused by a fault in the building’s design or construction, or by faulty materials.

This type of damage can be hugely disruptive, costly and complicated, and could have a serious impact on your business. That’s why it makes good commercial sense to mitigate the risk with building defects insurance – it can be essential for property developers, funders, and owners or tenants.

The security provided by a latent defects policy can encourage investors and can accelerate sales and lettings, and could help to make the future sale of the property easier.

What kind of projects can be insured?

We can arrange latent defects insurance for inherent or structural issues for a wide range of residential, commercial and mixed-use developments. You can be covered for speculative, non-speculative and completed projects. Coverholders can range from individuals doing a self-build to large-scale national developers.

Key advantages of latent defect insurance

Latent defect insurance means there's no need to establish who’s at fault or to prove negligence - and no need for slow, complex litigation before repairs can be done. There are no restrictions on the number of assignments (passing on to future owners), and immediate access to repair funds can minimise business interruption.

Latent defects insurance provides a cost effective, high-performance alternative to collateral warranties, although they often work hand-in-hand. Collateral warranties can only be actioned if the professional indemnity policy (to which they are usually appended) is still in place and all parties are still trading. You’d also need to prove negligence on the part of the construction team, which can be very difficult. However, structural defects insurance covers you even if parties cease trading, and there’s no need to prove negligence.