At Construction Insure we offer the whole package when it comes to property development insurance, from Building Warranties to Contractors All Risk insurance. We know exactly what insurances you will need to keep your project covered, due to having years of experience working alongside Developers and Lenders, who return to us year after year for new projects.
Type of build :
If you are changing the structure of a building by more than 50 % / converting a barn or a residential house to block of flats /converting a residential home to a block of flats/ converting a commercial premises into residential, or doing a new build,one of the first things you need to think about is developers insurance, as insurance can be expensive and you need to factor this in, so you have clarity over how much profit you should be making.
First off, a Building Warranty is essential if you are selling the property to someone who is going to be purchasing using the facility of a lender. If a building Warranty is not in place, you won’t be able to sell as the lender will not lend. The best warranties to go for are ones that are recognized by the banks, as if not, then there could be issues as lenders do not like lending when the warranty is backed by an unrated offshore provider. (especially after Alpha going pop a couple of years back)
With the Building Warranty insurance you need to get this going asap, as if you leave this until the end, the providers will not be able to send their surveyors down for site inspections, which means they have no solid proof on how well the structure (groundworks ,piles basements etc) has been built. This then means higher premiums, as the risk is greater.
With Building Warranty insurance, you need to get it going early. A tip, if you are using a building contractor, make sure you use a reputable builder, as if not this will load your premium. Building Warranty providers, latent Defects insurance suppliers, like to see that the builder is established, has carried out these kinds of works before and is not likely to vanish. Builders CV’s are powerful and if they can provide this, they really help.
If you are the Building Contractor and the Developer and might even be using a newly formed SPV company, again have a CV ready as this will showcase to the Building Warranty insurers what you have previously done. Sales brochures etc are a big help.
What Building Warranty insurance providers like to do is the send to your build site surveyors, who will make 5 or 6 trips dependent on which provider it is. They will then monitor works you are doing and give advice where necessary and feed back to insurers. This way all parties are involved in the build and everyone is on the same page.
Property Insurance Providers
At Construction Insure we have a strong set of providers for Building Warranties and know exactly which ones to use. Our relationships are very good meaning we get you covered with the right provider and the right price.
The next set of insurances will be dictated to you by the lender or the lenders Quantity Surveyor, if you are borrowing money. If not you are just left to your own devices which is why falling into the hands of a good construction insurance broker like construction insure is vital, as we shall advise you on exactly you will need, just like a QS would.
A quantity surveyor would usually demand you take out a Contingent Contract Works Insurance if you are using a building contractor, this way you have control of the contract works policy and if for any reason the contractors insurance fails you will be covered. If you are the developer and the contractor, you will need to take out a Contractor All Risk insurance, which will cover the public and employers’ liabilities, the contract works insurance and plant insurance.
Again, you must be careful when setting up these insurances and make sure all works are disclosed, i.e.. Are you doing works on your own build, or are the works for a third party? If works on your own build, then this is a decline for many insurers, and you won’t be covered, which is why placing with the correct insurer is vital. This is unfortunately what happens time and time again, when you get cover from a non-construction specialist.
Other disclosures, are you doing a basement dig, will the structure be timber framed, if so, what is the cost of the timber frame structure and who will be erecting it?? Will there be any elements of piling, underpinning demolition, again all of this needs to be taken into account, especially if you are the contractor/developer as you will need contingent cover against your bona fide sub-contractors’ insurances.
As well as this there might be the issue of legal indemnities, i.e. a Right of Light impeachment on neighboring properties, Restrictive Covenants on the deeds etc. A right of light insurance would have to be taken out before any works are carried out and the same for a restrictive covenant, as the last thing you as a developer needs is having to pull down the works.
Things to Consider
As you can see there is a lot to think about insurance wise when being a Property Developer and whether you are being guided by the lender on this front or not, it is crucial that there are no gaps, everything is declared and your insurances are therefore water tight, as if not this could end up costing you hundreds of thousands.
When it comes to Property Developer’s insurance, Construction Insure work extremely hard on making sure we have thoroughly gone through the project with you, so we have complete understanding of everything that needs to be covered, and you as the developer have complete understanding of why you need these insurances and how they are protecting your company and your build. We like to build relationships with our developers, and they come back to us on a regular basis and the reason is, is that they trust our knowledge and the insurers we use.
So, for your complete package for a property development insurance look nowhere else but Construction Insure.