Structural Warranty Insurance
Even after you’ve finished a construction project, your responsibility, and liability, for the build isn’t over. Did you know that, even twelve years after a completed build, your client can make a claim against you for any structural damage? Over a decade later, you can find yourself financially exposed and legally responsible for problems that have only just surfaced. They could have developed as a consequence of errors at the design stage, issues with incorrect construction or through the use of faulty materials. Fortunately, Structural Warranty Insurance can protect you from claims of this nature.
Why do you need Structural Warranty Insurance?
A Structural Warranty policy will safeguard you from any damages claimed against you for remedial work that needs to be carried out on a property you’ve built. For example: rectifying water damage; repairing unsound walls, floors or ceilings; or in extreme circumstances, ensuring that the building doesn’t collapse. You’re also protected from the costs of the removals, furniture storage and other associated charges of that type. And, if what’s termed ‘non-structural components’ fail, which are items such as boilers, kitchen units, wiring and piping, the policy also covers those costs.
Things to Consider?
If you’re intending to sell a building you’ve constructed, a Structural Warranty policy is something you’ll need to put in place. That’s because most mortgage lenders stipulate this cover for a building less than a decade old. While you can still sell without a policy, the legal fees alone would cost you many times the insurance premium, let alone the time you’d have to invest. Also, if you’re intending to refinance to let your building, long-term, you would need a Structural Warranty in place. An additional benefit of the policy is that, if you’re intending to occupy the property yourself, you won’t have to pay Community Infrastructure Levy (CIL). This tax applies where you’ve created an additional floor area of 100 square meters or more in a new development or home. There are other factors taken into consideration but, generally, your premium would be considerably less than paying CIL would be which, in some cases, can be as high as £50,000.
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Whatever your structural warranty insurance requirements, please get in touch today for a free no obligation quotation.
GETTING THE RIGHT STRUCTURAL WARRANTY INSURANCE
What types of Structural Warranty Insurance are there?
New Home Warranty
If you’re a residential contractor who’s building or converting private homes, in order to sell them on, this cover is the one you’ll need. It can be taken out for mixed-use developments and has the option of insuring you against developer insolvency, as well as obtaining alternative accommodation.
Social Housing Warranty
This policy covers you for up to twelve years on conversions and new builds. You can also obtain cover for loss of rent. And you can extend the policy to 15 years of warranty cover, with right-to-acquire cover extension, with no additional premium costs.
If a property has been built without obtaining a Structural Warranty, a Completed Housing policy will cover it up to a balance of ten years. So, if you have a three-year-old property, the insurer will cover your for the balance, which, in this case, would be seven years.
If you’ve bought a property through developer insolvency, Simple Completion gives you the cover that a mortgage lender would stipulate. This enables you, whether you‘re an individual or a company, to sell the property privately.
This insurance is for developers constructing their own homes. If you’re a builder working on a self-build development, you can obtain a policy on behalf of your client. Unlike Architect’s Certificates, latent defects policies provide cover in the event of damage caused by a defect in your property. To qualify for this insurance, you need to be planning to occupy the property for at least a year after it’s been completed. If you intend to be there for less time, a New Home Warranty is the insurance you’ll need.
Private Rental / Build-To-Rent (PRS)
Funders and institutional investors require this insurance to cover purpose-built private rental properties. They insist that these residences are constructed to the right standards and insured against structural defects. Structural issues would mean paying for repairs and maintenance as well as the impact of a loss of rental income. The policy covers problems with the design, build quality and physical materials for up to twelve years after the build is completed. Where the original builder fails to put things right in the first year, we have insurers who will get this done. So your investment is safeguarded.