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Why Is It Important Having Your Structural Defects Insurance In Place?

Let’s face it: complexity is a key characteristic of practically any construction project. Things can –  and will – go wrong, especially if you give them the opportunity. Several problems can happen while developing a property and construction projects are stressful enough without the thread of unforeseen troubles.

If you are a constructor or a property developer, you’ll surely have heard of Structural Defects Insurance (also called Latent Defects Insurance or Structural Warranty) and therefore know that it’s an item of your ‘to-do’ list that you absolutely shouldn’t forget.

This type of coverage is commonly perceived as a support that (hopefully) will never be called upon. Truth be told, Structural Defects Insurances matter a lot – even if you never need to use them to cover a claim for poor design, workmanship, materials or installation.

Here are four proven reasons why you should always remember to contract Latent Defects Insurance for your new build projects:

1. It's a guarantee of your reputation and brings you peace of mind

Structural Defects insurance gives you 10-years protection and peace of mind. If defects appear in the property structure, this insurance will cover the costs of repairing the defects and fixing any structural damage years after the project completion. In addition, it covers developing defects that could led to damage – meaning that it will solve the problem even before it has the chance to get any worse. Your reputation as a developer may depend on it.

2. Makes selling easier

Commonly, mortgage lenders want assurance that the property has a solid protection against building defects. Even after the initial conveyance, lenders will continue to see the home as a new built for around 10 years after completion. If you are planning to sell the property within the first 10 years, taking out this insurance is a way to make selling easier. Having a Latent Defects Insurance in place is also recommendable for buyers that are in a position of buying a home withcash instead of taking out a mortgage, as it ensures they will be able to sell the place in the future to a buyer who does need the mortgage route.

3. It's transferable

Prospect buyers usually consider more trustworthy and attractive a property which comes with Structural Defect Insurance as it is easily transferable. It can simply be transferred from one party to the next when a property is sold, giving the homeowner assurance that potential future risks to the property structure will be covered.

4. Makes it easier to claim a defect

If you have a Structural Defects Insurance in place, it’s quicker and easier to make an insurance claim for a defect. With this cover, there’s no need to prove fault or negligence. To simplify the whole process, you just need to prove the defect’s existence and proceed to submit your claim to fix it. However, this is always subject to the policy terms and conditions.

Repairing the average structural defect can cost as much as £40,000, so it’s sensible to have a comprehensive developer’s warranty that covers every eventuality.

With most Structural Defects Insurance, there is usually a two-year period after completion when you can report any detected structural deficiencies directly to the developer. However, CRL offer the advantage of immediate cover with no extended builders liability cover, making things easier for customers and developers. For a full introduction to CRL and what we offer, have a look at our Structural Defects Insurance and its advantages.

Structural Defects Insurance

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