Latent Defect Insurance Benefits

Structural Warranty Insurance

For developers, claims arising from latent defects in developments are fraught with difficulties, costs and aggravation.

The inherent risks associated with contractors’ and subcontractors’ Professional Indemnity insurance cover, more commonly known as Collateral Warranties, are the root cause of the problem.

The solution can be found in Maison’s Structural Warranty Insurance, providing certainty and peace of mind for developers and premises owners alike. For building warranty insurance, we cover the full range of developments, large or small, including major projects.

Collateral Warranties: An Unreliable Safeguard

In stark contrast to the residential market where developers have the reassurance of a conventional structural warranty insurance policy on which they can rely, there is no mandate for a structural warranty insurance policy to be in place for developments.

The insistence of mortgage lenders on the inclusion of a structural warranty policy for residential developments is the essential difference between the two markets, and one which puts developers at a distinct disadvantage in the event of a claim.

The insistence of mortgage lenders on the inclusion of a structural warranty policy for residential developments is the essential difference between the two markets, and one which puts developers at a distinct disadvantage in the event of a claim.

With no conventional insurance cover to call upon, commercial developers can only hope that the scope and suitability of their contractors’ and subcontractors’ collateral warranties are sufficient to recover any monies.

Collateral Warranties’ Unreliability Explained

Notwithstanding that it is the developer who must administer the time-consuming and cumbersome process of ensuring that all contractors/subcontractors even have a collateral warranty in place, there are a host of reasons why collateral warranties are an unreliable safeguard:

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    The contractor/subcontractor must still be trading; with valid claims arising up to 12 years later, there is a significant risk that the contractor/subcontractor will no longer be in existence.

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    The contractor/subcontractor must have the financial resources and capability to deal with any emerging or actual fault.

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    The contractor/subcontractor must be willing for their collateral warranty to perform as per originally provided.

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    The developer must initiate and fund legal proceedings to recover monies if the contractor/subcontractor denies the claim.

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    Court proceedings in this field last on average around 18 months with no guarantee of success, thereby creating a huge drain on resource and cashflow problems for the developer.

With collateral warranties, developers are exposed to the weakest link in their supply chain. Maison’s Structural Warranty cover gives developers the reassurance they need to complete  projects, safe in the knowledge that they have building warranty insurance protection.

Are you looking for a quote for your commercial or residential development?
Maison’s Structural Warranty cover gives developers the reassurance they need to complete projects with the right building warranty insurance protection in place.

Focused Risk Management

At the heart of the ability to identify, manage and mitigate risk is the rigorous application of the highest technical standards in building and construction. We only work with insurers who assess each and every development on its merits, by considering the complexity of the site, the environment, the type of construction being adopted and the capabilities and expertise of the builder or developer.

The Technical Surveyor will agree with you the stages when they will need to inspect the development site. These inspections are designed to pinpoint, assess and propose rectification measures for any structural and weather penetration issues arising.

Whilst no programme of risk management inspections can eliminate all risks, Technical Surveyors will oversee a comprehensive review programme targeting all critical areas and stages of the build to minimise the risks as much as possible.

Advisory Services

Maison works with a network of specialist companies to ensure our customers have the opportunity to benefit from a range of advisory services which are not widely available in the latent defect market. These advisory services include:

  • Combined Statutory Building Control and Warranty Technical Audit Visits
  • Stage Completion Certification for Lender Requirements
  • Party Wall Advice
  • CDM (Construction Design Management) Advice
  • Air Pressure Testing
  • Energy Performance Certification
  • Water Calculations
  • Extract Fan Testing

FAQs

How much capacity can Maison provide for latent defect insurance?

We can provide building warranty insurance capacity to cover commercial and residential developments of all sizes, from the very small to the very large and complex; our relationship with both non-rated and ‘A’ rated insurers means we can provide limits beyond those available as standard in the commercial insurance markets.

On the pricing side, preferential rates for building warranty insurance can be granted to developers with a demonstrably successful track record in construction.

What technical support does Maison offer for latent defect insurance?

Your insurance representative will instruct a team of Technical Surveyors who will liaise with you to ensure that they have a full understanding of what you want to achieve. All technical Surveyors are qualified to the highest professional standards. Technical Surveyors will endeavour to:

  • Minimise the risk of defects being undetected
  • Reduce uncertainties on difficult sites
  • Help reduce claims
  • Ensure that premiums are kept as low as possible
  • Increase satisfaction for the building user or homeowner

Your dedicated relationship manager will ensure all technical queries and administrative matters are managed promptly and fully.

How many inspections will Maison undertake?

The Technical Surveyor will agree with you the stages when they will need to inspect the development site. Dependent on the initial and ongoing risk management assessments undertaken by your Technical Surveyor, the number of inspections made during construction may vary from one development to another.

 

StageCommercial & Residential DevelopmentsSelf-Build Residential
1Foundations to Ground FloorsPre-start Meeting
2Superstructure to Upper FloorFoundations
3Upper Floors to RoofSubstructure & Drainage Works
4Roof StructureGround Floor to 1st Floor
5Pre-Plaster1st Floor to Wall Plate
6Post-PlasterRoof Structure
7CompletionRoof Covering
8Pre-Plaster
9Post-Plaster
10Pre-completion/External
11Completion

Basements will require extra stage inspections for all development types.

What additional advisory services can Maison provide?

Maison works with a network of specialist companies to ensure our customers have the opportunity to benefit from a range of advisory services which are not widely available in the latent defect market. These advisory services include:

  • Combined Statutory Building Control and Warranty Technical Audit Visits
  • Stage Completion Certification for Lender Requirements
  • Party Wall Advice
  • CDM (Construction Design Management) Advice
  • Air Pressure Testing
  • Energy Performance Certification
  • Water Calculations
  • Extract Fan Testing

How can I get a quote and access my policy information?

We have made it easy for customers to get an indicative quote and access their policy information through your relationship manager who is always available to create a quote or assist with any building warranty insurance policy related queries.

Can Maison source insurance for Special Purpose Vehicles?

Yes, we can source building warranty insurance cover for Special Purpose Vehicles provided there is a clear and documented link between the SPV and the parent company. We may ask for a Parent Company Guarantee or Bond.

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