Latent Defects (Structural Warranties).
Latent defects helps when it comes to structural issues. This is as it can sometimes take a while for problems to become evident. In most cases, the passing of time can make the damage which later occurs worse than imagined. In rare cases, this can result in a building or structure’s partial or total collapse. When this occurs, latent defects insurance comes into play. On this page, we will explain how an insurance policy provided by Trinity Indemnity can help protect the investment of all involved.
What are latent defects, and what causes a latent defect?
Latent defects are problems which occur within the structure of a building that have yet to be noticed. They are hidden faults that building surveys have failed to detect. The truth is a latent defect can be caused at any point in the construction process and result from building, workmanship, design or the materials used. It’s essential to remember that a latent defect can take weeks, months or years to occur.
What is latent defects insurance?
Latent defects insurance covers the cost of repairing structural defects and pays to rebuild a structure if it is uninhabitable or not considered fit for purpose.
Latent defect policies can also provide additional covers, for example:
– Demolition and debris removal
– Alternative accommodation for the property’s inhabitants
– Building control services
– Contamination cover
– Mechanical and electrical faults
Latent defect policies usually have a lifespan of up to 12 years after completion. Trinity Indemnity can also help reassign the policy to a different person. For example, if a developer sells a home to an individual, the latent defects policy can be transferred to the buyer.
What isn’t covered by a latent defect insurance policy?
The load-bearing capability and the structural integrity of a building are both covered by a latent defects insurance policy. Other problems which may occur, including plumbing and heating issues, fixtures and fittings etc, are not covered by the policy.
Who needs latent defects insurance?
A Latent defects policy is often purchased by developers of new-build properties and those converting commercial property into residential dwellings. Property developers, architects, construction firms and builders would typically buy a latent defects policy.
How much does latent defects insurance cost?
The cost of latent defects insurance is mainly dependent on several different factors and circumstances, for example:
– The rebuild value of the property (the sum insured)
– How the building is constructed
– What materials are being used in the construction
– The type of structure the policy is for
– The number of buildings the policy applies to
– The experience of the Contractor & track record of the developer
How does latent defects insurance work?
What differentiates latent defects insurance from many other insurance products is that there is no need to establish fault for a claim to be successful. There are usually no court proceedings as evidence of the defect is enough for the claim to suffice.
Is latent defects insurance the same as structural warranty insurance?
YES! Latent defects insurance is also known as structural warranty insurance or structural guarantees.
What if the builder or contractor goes bust before a claim is made?
If the latent defect insurance policy is in place to cover the building, the claim will still be valid regardless of the builder’s solvency.
Do I need a latent defects insurance policy?
Latent defects insurance is essential for any business that works within residential construction. It can also provide the necessary cover should you add an extension to an existing property. When selling a property, the buyers’ mortgage provider will typically request that there is a latent defects policy in place.