YOUR FMB LATENT DEFECTS INSURANCE
Why do you need Latent Defects Insurance?
It’s insurance for the future, providing peace of mind to the homeowner or buyer and helping them secure finance or mortgage funding. When selling a home that is less than 10 years old, the buyer’s mortgage provider will normally want proof of Latent Defects Insurance. Remember, the property is covered by Latent Defects Insurance so policies can be transferred to the future owners of a home.
YOUR GUIDE TO LATENT DEFECTS INSURANCE
How does this insurance work?
Insurers look at each project on an individual basis, considering the size and complexity of the build, and the method of construction. To get a quote, you’ll need to complete an application form and provide technical information such as building regulations drawings, structural calculations and project specifications. Insurers might also request the reinstatement value – which is the rebuild cost of any existing structure – as a requirement if you’re carrying out a conversion or structural work on an existing property such as an extension, renovation or loft conversion. As part of the insurer’s due diligence, they may review your accounts or those of the developer to confirm you’re able to meet the two-year developer / builder liability period. FMB Insurance offers complete construction support, providing you with complete business protection under one roof. If you would like more information or you’re ready for a quote, contact our team on 01353 652 760 or email insurance@fmb.org.uk .
Latent Defects Insurance – what is it and why do you need it?
W hether the job is a new build, conversion, loft conversion, renovation or a commercial project, Latent Defects Insurance is an important consideration to protect your business. OK, but what is a latent defect? It’s a defect within the building's structure that wasn’t apparent during construction and could not have been discovered during the inspection process. It becomes obvious after completion, sometimes many years later. What is Latent Defects Insurance? It protects homeowners from possible defects and water ingress in a newly
built, renovated or converted home. It covers the cost to repair or rebuild the structure and includes elements such as contamination of land, alternative accommodation, additional costs and fees, and removal of debris. The policy is generally available for 10-12 years from the date of practical completion. How does this differ from Buildings / Home Insurance? Buildings Insurance covers insured perils such as fires, floods, lightning, earthquakes, vandalism, explosions, etc. It also covers permanent fixtures and fittings, which Latent Defects Insurance does not.
1 Work in Progress: their deposit to the developer until practical completion of each residential property. This can be optional cover so be sure to confirm that it is provided. Operates from the date the insured person pays
2 Defects Insurance Period: Begins once the works achieve practical completion and from the date specified in the Certificate of Insurance. This section of cover is generally in place for 24 months.
3 Structural Insurance after practical completion – where section two ends – for the remaining period of eight to 10 years as specified in the Certificate of Insurance. Period: From the date of the second anniversary
How does the cover work? Latent Defects Insurance policies are made up of different cover sections depending on the stage of your build.
Master Builder 40
www.fmb.org.uk
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