Structural warranties in its basic terms is an insurance policy to protect you from costs incurred if defects occur to the structure of your residential or commercial property. Typically for a period of 10-12 years after completion

A structural warranty / latent defects insurance policy is typically purchased by the builder, developer or home owner if a self-build before the construction starts.

What does a structural warranty / latent defects policy cover?

It varies significantly dependant on the insurance company but can include:

• Defects insurance – the more prominent providers of structural warranties will include a defects period for the first two years of cover. This provides protection against non-compliance with the warranty provider’s technical manual and may include non-structural issues.
• Structural insurance – this consists of the principal part of the warranty and covers against structural issues after the defects period expires.
• Contaminated land – protects against the cost of removing contamination from the housing plot.
• Building Control cover – if features of the house were not built in compliance with Building Regulations and can result in a danger to the health of residents this can cover the costs to rectify any issues.
• Deposit protection – should the developer become insolvent during the build this protects the homeowner’s deposit.

Is a structural warranty policy compulsory?

Whilst it is not compulsory you will find that most lenders will insist and you will have problems in selling if the development is less than 10 years old.

Insuring a residential, commercial or mixed-use development will follow a typical process:

• Plans are submitted, specifications drawn up and the completion of an application form.
• An insurance quotation is calculated for for the project in question.
• An inspector will visit the applicant for an appraisal meeting.
• The applicant signs and returns the acceptance letter.
• The warranty insurance provider will supply a technical manual, their policy documents and a site folder to log progress and record inspection results.
• The development build begins and site inspections are requested at agreed stages to check compliance with all the warranty standards.
• When the development is complete and all stage certificates and a completion certificate have been issued the 10-year latent defects cover begins.