Structural Warranty Insurance

Also known as latent defects insurance, structural warranty insurance is a type of policy that covers defects in new buildings for a set period following completion, usually 10 or 12 years.

Policies are generally purchased by developers before any building work starts, but the point of the cover is to protect the homeowner from structural defects or damage that happens within the protected time period. And because it’s there to benefit the owner of a specific property, it transfers automatically from owner to owner within the 10 or 12 year term.

A structural defect is a fault in a new building that could be caused by design failures, poor workmanship, or low-quality materials during the build phase, which may only become apparent several months or even years after the completion date. Structural defects cause physical damage to a property and can include problems with the load-bearing foundations or walls, structural cracks, roof coverings, or other major issues.

Fixing structural defects can be highly expensive. And with a relatively high number of defects reported, it’s important that property developers, builders, and self-builders take out protection. That’s where a structural defects warranty can help.

Yes, in essence it is specifically tailored to covering structural damage as a result of an inherent or latent defect for a property.

Standard structural insurance cover protects the structure and weatherproofing of a new build property, including the necessary and reasonable costs of:

• Rectifying or rebuilding either the whole or part of a building that has been damaged because of defects in design, workmanship, or materials.
• Making good any defects in the newly built or changed drainage system.
• Rectifying, repairing, or replacing any defective waterproofing elements of the property caused by failures in design, workmanship, materials, or components.

Typically, a policy can also cover an initial two years of defects insurance and building control services. On top of that, structural damage insurance can be extended to cover non-structural aspects of a new build, such as component failure, mechanical and electrical services, and business interruption or loss of deposits should the contractor become insolvent during the build stage.

There are a range of structural warranty providers who can supply varying levels of cover depending on your needs – giving both property developers and their buyers peace of mind that if any structural defect occurs, they can claim for the cost of repair.

If you are building a new home to sell (whether that is on completion or sometime after) it’s likely you’ll need structural warranty cover as it’s often a requirement from mortgage lenders.

Even if you are building your own home, you will still need a structural warranty in case you need to sell the property within 10 years of completion, as most mortgage providers require a warranty before they lend on newly built homes.

This applies to any type of property you are developing that involves major structural work, including:

• Commercial and residential buildings
• New builds and renovations
• Conversions, extensions, and refurbishments
• Permitted developments
• Private rental sector and social housing
• Student accommodation
• Retrospective

Many lenders require a ten year structural warranty policy on new build and renovated projects. Without a warranty you may be limiting your potential market of buyers. A fairly recent court case highlighted some of the problems associated with reliance on architects certificates. They are an extension of the architects professional indemnity cover and as such you will need to be able to prove they were professionally negligent. Additionally, if the architect is no longer in practise or fails to renew their cover it can often lead to no protection. For more information: https://www.thenbs.com/knowledge/court-of-appeal-provides-clarity-on-architects-certificates

We have providers able to cover completed projects, or partially completed projects.

Yes, we provide cover on most types of development from single units to mainstream apartment developments, conversions and change of use, mixed use, commercial, extensions, and renovations.

Yes, we think you should because they are both very different in what they provide. A buildings insurance policy provides cover in the event of fire, subsidence, lightning, explosion, storm damage etc., but specifically excludes damage caused by faulty or unsuitable materials, design, or poor workmanship. Which is why you should consider purchasing a structural warranty policy as well as buildings insurance.

No, it is simply a certificate issued by the building control inspecting party to confirm that the property meets the requirements of the building regulations with regard to health and safety.

Structural warranty insurance is sometimes also known as structural defect, latent defects insurance, building warranty, home warranty, construction insurance, and self build insurance. It’s important to understand what’s being provided and that’s where a broker such as ourselves can help.

Nearly all banks and mortgage providers require a structural warranty as a condition of releasing funds on a new property, so if you want or need to sell the properties that you build, you will definitely need this type of cover.

New home warranties give you peace of mind that if anything does go wrong with the property you’ve constructed, you are covered for the potentially high costs of repair or rebuilding. It gives you comprehensive protection for any mistakes made by inspectors, architects, or contractors, as well as faulty materials or unforeseen issues with the land you’re building on.

A structural warranty will also make your property more attractive for prospective buyers, as it means they won’t have to go through complex litigation or prove fault to claim for a structural defect. The warranty will simply transfer to the next owner if the property is sold again during the cover period.

To make sure you have an appropriate level of protection, check whether your policy includes the following:

• Building control services cover. Surveys for building control are combined with structural warranty inspections to save you time and hassle.
• Defect cover. Including all major areas, such as load-bearing foundations, roof coverings, load bearing walls, partitions, floors and staircases, roof framing systems, loadbearing lintels, and chimneys and flues.
• Debris removal cover and contamination cover for the land where the property is built.
• Professional fees. For example to pay for architects, surveyors, lawyers, consulting engineers and any other costs that arise when repairing a structural defect.
• Cover for non-compliance with building regulations. Including the cost of repairs where non-compliance poses a health and safety danger to the occupants.
• Alternative accommodation in the event the property becomes uninhabitable because of the insured defect.