Latent defects insurance ensures that you are covered for any faults or defects that are uncovered after completion of your project, these issues may not be visible for many years and a latent defects claim can prove to be very expensive.
This type of insurance covers you for new buildings or new work to existing buildings in the event that latent defects are discovered. These can be due to design issues, workmanship or the type of materials used.
Latent defects insurance is becoming more popular within the construction industry to avoid expensive claims arising years and years after work is complete, such claims have been known to cause companies to become insolvent and so by ensuring cover is in place it gives business owners peace of mind.
Types of latent defects insurance policies
With more policies available, cover is normally given for a period of between 8 and 10 years from issue of certificate of practical completion. Longer time periods are available but this seems to be the standard. The cover in place should provide for the full rebuild cost, repairs or additional works to avoid damage.
A basic policy will cover you for a minimum amount of work such as structure and weatherproofing. But more robust policies will also insure you for non-structural parts of the project, this can be anything from installed lifts, through to heating or air conditioning and many more.
Payment is either annually, monthly or a one off payment for the entire project.
Latent defects insurance doesn’t other types of insurance policies and will only cover you for a maximum amount (usually re-build cost is the highest) so it should be seen as a fixed project insurance policy.
Find out more about the types of latent defects insurance policies that we offer.