On completion of a new build, defects can sometimes be discovered. These faults are commonly caused by damage due to poor design, inadequate workmanship or faulty materials, and they may not become apparent for a number of years.

Whether you’re a developer, financier, owner or commercial occupier, these defects can range from the irritating to the catastrophic, and their impact on your business and reputation can be severe. It makes good commercial sense to mitigate the risk with latent defects insurance.

There has never been a better time to consider these covers due to factors such as:

  • Declining quality of raw materials such as iron pyrites in roof tiles.
  • Sustainable materials such as green oak frames/cladding and sedum roofs.
  • Innovative materials such as solar panels, ground/air source heating.
  • Large numbers of contractors becoming insolvent.
  • Mortgage lenders tightening lending criteria.
  • Home improvements such as basements, extensions, loft conversions.
  • Structural repairs following insurance claims for subsidence, fire, impact, earthquake etc.

If you are having repair works or structural alterations done on your property then insist that the contractor provides you with a minimum of a 10 year insurance backed guarantee for the materials and workmanship. In many cases the lack of a guarantee on any works done in the past 10 years can cause problems for a seller of a property.

We have the proven expertise and in-depth knowledge that enables us to deliver a superior level of latent defects cover that fills the gaps others may leave behind. Latent defects insurance provides a cost effective, high performance alternative to collateral warranties across a diverse range of residential, mixed and commercial new builds.

If you would like to find out how we can protect your property assets with a range of bespoke latent defects insurance, simply contact 0121 764 5500 and speak to one of our brokers today.
Residential property

Council of Mortgage Lender approved warranties are available with cover for 10+ years – extendable to include component failure, extensions, alterations and where work has already begun. Cover includes self-builds, barn conversions and where the contractor/developer or architect goes into liquidation or has failed to take out a warranty.

Commercial property

We can arrange bespoke latent defects cover on almost any type of commercial property including extensions or alterations, where construction is already underway or where the contractor, developer or architect has gone into liquidation.

Mixed retail & residential

All the features you expect plus Council of Mortgage Lender approved warranties on residential sections, and latent defects cover on the commercial parts of your property.

Mechanical & electrical

With cover in force for up to 12 years following practical completion, mechanical and electrical latent defects insurance typically covers: defective plant or machinery; lifts and escalators; window-cleaning equipment; environmental, electrical and water pumping control systems as well as electrical distribution systems.

Insurance-backed guarantees

Available for most construction work, an insurance-backed guarantee (IBG) provides insolvency cover for a guarantee issued by the product manufacturer and/or installer for the period of the guarantee.Depending on the life expectancy of the product / materials used, cover can be arranged for up to 20 years.

Typical exclusions:
  • Damage discovered outside the period of insurance
  • Anticipated or planned-for movement, settlement, shrinkage or expansion
  • Abnormal use or overloading
  • Wear and tear or inadequate maintenance
  • Change in colour or ageing process
  • Contractor’s contractual obligations for snagging
  • Damage to paint and other surface coatings

These are just some of the key exclusions/limitations, full details can be found in policy wordings.

Who can be covered?

Cover can be instigated by the developer, contractor, owner/landlord, funders or tenants. The policy can be reassigned to future owners and tenants.

What does it cost?

The rate is dependable on a number of factors but, as a guide, comprehensive protection will rarely exceed 1% of the building reinstatement value.

When do you need to pay for it?

Deposit premiums and technical audit fees are payable prior to the policy starting. The balance is due at practical completion. and is not an annual payment.

With Adler Insurance, you can be confident that, in the event of the worst happening, your claim will be handled by our in-house claims team. This means  a fast and efficient service that many insurance brokers have to outsource to achieve.

Simply contact the claims team using the details within your policy documents, or call us on 0121 764 7563 to speak directly to a claims handler. They will talk through your claim, guiding you through your next steps the whole process.

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