Latent defects insurance is a cover taken out for new build commercial and residential premises. It is designed to cover defects which manifest within the structure after practical completion.
What is Latent Defects Insurance?
Latent defects insurance (also commonly referred to as a structural warranty) is a form of insurance that primarily provides indemnity against the costs incurred in rectifying defects that manifest within the structure after practical completion.
It is a requirement of UK Finance (formally known as the Council of Mortgage Lenders) for all new build residential open market sales but can also be purchased for commercial and mixed-use developments.
Policies can also be extended to include:
Mechanical and Engineering Defects
Loss of Deposit/Insolvency of Developer
Loss or Rent
Why do I need latent defects insurance?
Also known as New Home Warranties, Latent Defects Insurance is required by the Council of Mortgage Lenders for all new build residential open market sales.
There are often faults and defects caused by failures in design, workmanship or materials throughout the construction process and may not be detected for many years after the completion date. Our specialists are on hand to assist with the complexities in arrange the right cover for you.
These defects can be extremely expensive to rectify and the Latent Defects Insurance offers protection to homeowners.
What does latent defects insurance cover?
We can accommodate the following types of risks:
Commercial and Residential buildings
New Builds and renovations
Conversions, extensions and Refurbishments
Grade 1, 2 Listed Buildings and Hotels
Private Rental Sector and social Housing
Key features of our latent defects insurance
Cover will be provided for 10 years from the issue of the building control completion certificate (12 year polices are available if requested).
A standard policy will cover the structure and weatherproofing but this can be extended to include non-structural elements such as component failure, mechanical and electrical services and business interruption.
We are a one stop shop for all your Latent Defect Insurance and site requirements. Key features include:
Simplified process to accommodate your project requirements: simply complete an electronic proposal form which we will provide you with, and supply us with a copy of the plans and elevations. We will then review the information and approach the relevant insurers that can accommodate your project requirements.
Accommodating payment terms: we can offer flexible payment options to suit your needs.
Market knowledge: our specialists have the most up to date information on any market changes as they receive updates first hand from each provider.
A personal approach: a dedicated specialist will be on hand to review each project from start to finish. We help to manage the technical relationship between your site manager and the provider’s technical team. In addition, we will be the initial point of contact in the event of a claim throughout the duration of the policy
Other business covers in one policy
We can offer you a simplified package, as we can collate a Towergate portfolio of insurance.
A typical contractors’ insurance package will consist of:
Insurance Backed Guarantee - Offers valuable protection for tradespeople in the unlikely event of your company ceasing to trade. Various areas can be covered under and IBG and cover is often required alongside LDI in relation to workmanship and materials for example, Flat Roofing
Contractors All Risks (CAR) – insurance protects against physical damage to works and site materials that the company was contracted to undertake. This is the most common insurance policy for contractors/developers
Public Liability – injury to 3rd parties (nonemployees) or their property
Employers Liability – Coverage to protect against liabilities to employees for injury or illness. This is a mandatory cover if directly employing staff or labour only sub-contractors
Professional Indemnity – Protects against loss or damages from professional negligence or negligent advice (design is a common one)
Right for Light
Surety Bonds & Guarantees
Why use Towergate to arrange your latent defects insurance?
The Latent Defects Insurance market has seen many changes in the last 12-24 months with some of the leading providers withdrawing from the market and various insurers increasing rates or reducing coverage.
These changes present the ideal opportunity to consider using Towergate Insurance Brokers to negotiate your next warranty and leverage our key market relationships to provide you with the best coverage at the right price.
We also have considerable experience across the construction sector and can assist in the following areas which may also be of consideration in connection with your development:
Contract Works cover
Employer’s and Public Liability cover
Professional Indemnity cover
Property cover (both existing structures or the completed project)
Insurance Backed Guarantees
Legal Indemnities e.g. Right to Light
Bonds (Performance/Advanced Payment/Road and Sewer etc)