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Latent Defects Insurance

Not every structural defect is visible when a project is completed. Problems with design, materials or workmanship may only become apparent years later, creating unexpected costs and uncertainty for property owners and investors.

Hidden defects can have lasting consequences

Latent Defects Insurance protects commercial and residential developments against qualifying structural defects that emerge after completion, helping protect your investment when contractors or consultants may no longer be responsible.

The challenges facing
construction projects

Hidden structural defects

Some defects in design, workmanship or materials aren’t discovered until years after construction has finished.

Proving liability

Without first-party insurance, establishing who is responsible for a defect can be costly, time-consuming and uncertain.

Contractor insolvency

If contractors or consultants are no longer trading, recovering the cost of repairs may be difficult or impossible.

Protecting asset value

Long-term protection can help maintain the value and marketability of a property for future owners and investors.

Meeting lender requirements

Funders and purchasers often expect suitable structural protection before progressing with a development or transaction.

Managing long-term risk

Structural issues can emerge years after completion, making long-term protection an important part of managing construction risk.

How we support you

Whether you’re protecting a single development or a portfolio of projects, our specialists will help you find the right cover for your requirements. Combining local expertise with global capability, we work with leading insurers to protect your investment with confidence.

  • Specialist latent defects expertise
  • Access to trusted warranty providers and insurers
  • Tailored cover for your project
  • Support from enquiry to completion

Here to help

Frequently asked questions

What is Latent Defects Insurance?

Latent Defects Insurance provides long-term protection against structural defects caused by issues in design, workmanship or materials that only become apparent after a building has been completed. Policies typically provide cover for 10 or 12 years from practical completion.

Can Latent Defects Insurance help satisfy lender requirements?

Yes. Many funders and institutional investors look for long-term structural protection as part of their risk management requirements. The appropriate policy can also make a property more attractive to future purchasers and investors, while helping to satisfy lender expectations for new developments.

Who should consider Latent Defects Insurance?

Latent Defects Insurance is suitable for commercial property developers, property owners, funders, investors, main contractors and other organisations with a financial interest in a completed building. Policies are typically assignable, allowing protection to transfer to future owners and providing reassurance throughout the life of the building.

What does Latent Defects Insurance cover?

Policies are designed to cover physical damage resulting from inherent defects in the design, workmanship or materials used during construction. Cover typically includes the cost of repairing or reinstating the affected parts of the building, subject to the policy terms and conditions, helping to transfer the financial risk from the property owner to the insurer.

How is Latent Defects Insurance different from a collateral warranty?

A collateral warranty requires the policyholder to establish negligence against the party responsible for the defect. Latent Defects Insurance is first-party insurance, meaning qualifying claims are made directly against the insurer without first proving liability. It can also continue to provide protection even if the parties involved in the original construction are no longer trading.

When should Latent Defects Insurance be arranged?

It’s generally best to arrange cover before construction begins, allowing the insurer’s technical inspection process to be incorporated into the project. Depending on the insurer and project, cover may also be available once construction is underway or, in some cases, retrospectively.

Why is Latent Defects Insurance important if a contractor becomes insolvent?

If a contractor, consultant or other party involved in the project is no longer trading, pursuing a claim can be difficult. Latent Defects Insurance continues to provide protection throughout the policy period, giving owners, funders and future purchasers greater certainty and reducing reliance on the financial position of those involved in the original construction.

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