Latent Structural Defects Insurance

Latents Defects INSURANCE

Owner Builders

In the event that a structural defect affects the structural integrity of the building causing the building or any part of the building to be considered unsafe and therefore unliveable.

It is a hassle-free solution which doesn’t rely on proof of negligence, just proof of defect and damage, because negligence and fault do NOT have to be proved, ensures that rectification is swift and easy.

This policy is transferrable, and it will be an added benefit if you choose to sell.

This could be you?

Carpenter on disabled pension takes on one of Australia’s biggest builders and wins but at what cost.

He agreed to pay $193 000 for his home to be built but then things started to go wrong

It started a 2-year legal fight.

The Age – 10th October 2017

Benefits of Cover for you.

10-year non-cancellable policy	Transferrable to future owners on disclosure to underwriters
No delays over whose fault	Owner/developer/builder protected
Asset protection	Avoid delays due to litigation
Insurer (Certain Underwriters at Lloyd’s) fixes	No delays over remedial work
Increase Asset value by having insurance protection	Where rights of recovery exist, it is at the insurers expense not the Owner or Builder

There are many examples where defects caused by poor design, workmanship or materials which are not apparent until 5,8 or 10 years after completion. To fix any of these problems will be very expensive and cause untold disruption to your lifestyle.

Your Latent Defects Insurance policy is in place for you to claim, The insurer, not you will rectify the damage to which the policy responds. It is a 10-year policy, transferrable to the next owner and is a one off premium payment to secure the 10 years cover not an annual premium payment.

Your responsibilities are, to ensure that during construction works, all known defects are rectified prior to the Completion Certificate being issued, as the policy responds after the Completion Certificate has been issued.

Why you should buy Latent Defects Insurance

You now are better protected because instead of relying on tradies and suppliers to ‘do the right thing’, and structural defects may not become apparent until years later.

E.g. Roof sags – Trusses incorrectly fitted
Walls buckle- the timber was left in the yard and warps prior to installation
Slab cracks- mesh not added or incorrectly placed
And what about waterproofing, second story floor beams…

All of this you will not see until years later when rectification could cost a fortune.

Solution = Latent Defects Insurance

Policy Covers:

Developer, Builder, Owner Builder, Homeowner & Future Purchasers - Owners Corporation/Body Corporate	Structural Defects
No fault requirement	10 Year Policy
Non-Cancellable	Underwritten by Certain Underwriters at Lloyd’s

What we require:

Application form prior to starting	Building Permit
Completion Certificate	Approved inspection
Technical inspection report	Payment

Who else can access this product?

Developers, Body Corporate

Residential and Commercial Builders

FAQs

Frequently Asked Questions

Welcome to our FAQs section, we have answered your questions here.
If you can’t find the answer you’re looking for? Get in touch with us.

Difference between Builder’s Warranty and Latent Defects Insurance

Builders Warranty, Builder is statutory required to supply 6 year Builders Warranty to cover homeowner if Builder dies, disappears or becomes insolvent e.g. Takes deposit- disappears, defects arise and ‘fight’ occurs. There is an implied 10 Year Warranty period under the ACT.

The Builder is responsible!

Latent Defect Insurance, The Builder is the insured along with homeowner – no liability on the builder, no personal guarantees. Policy Is for 10 Years. In the event of a potential Structural Defect the insurer and NOT the builder is responsible.

How long does the Latent Defects Insurance period last?

What is the difference between Structural Defects Insurance and Latent Defects Insurance?

Is Latent Defects insurance transferrable?

How much is the excess?

What is the most I can claim?

Why take out the policy before I start?

Who is the insurer?

Who is responsible for fixing the Structural Defects if they arise?

What can I insure?

Who can take out the policy?

Can I make a claim during construction?

Can I be sued under the policy?

How long would it take to fix the defect?

What is the difference between Owner Builder Latent Defects Insurance and Owner Builder Warranty Insurance

Owner Builders Latent Defects Insurance protects the Owner Builder while they are living in the home they have built, for structural defects for up to 10 years after completion.

It is transferrable for the 10 year period and in the event of a Structural Defect occurring, the insurer, Lloyds of London has the option of taking action against the person(s) responsible, not you the Owner Builder, you are the Insured. Once accepted, the Insurer will fix the Structural Defect and you are not involved in legal litigation, hassles and cost.

Owner Builder Warranty is a statutory requirement if the Owner Builder sells, it is for the benefit of the purchaser if the owner builder dies, disappears or becomes insolvent in the event of a claimable event. It is a statutory requirement and you the Owner Builder are responsible to fix any non-structural defects (2 years) and Structural Defects (6 Years) of the home bought by the purchaser. It is mandatory in Victoria and Western Australia.

N.B. There is an implied 10 years warranty period. So even though Warranty Insurance has a 6 year period, you are on risk for 10 years and if a structural defects occurred in year 9, then you are required to fix the problem.

I won’t need this, I know my tradies.

How much will it cost?

What is the technical inspection report?

Am I responsible to fix the defects once the Policy starts?

Is there a maintenance period?

Is there a 10 year implied warranty for defects?

Can I buy Latent Defects Insurance after I have finished building?

Difference between Construction and Public Liability and Latent Defect Insurance.

It will be a new building, why do I need Latent Defect Insurance?