How much does latent defects insurance cost?

When a property starts to display structural defects months or even years after construction has been completed, it’s a stressful time for homeowners. Whatever the defect, it can incur a large price to repair the issue.

However, this is where latent defects insurance comes in. This particular insurance policy can provide financial cover to homeowners and property developers.

But, how much does latent defects insurance cost? Read our helpful guide to find out.

What is latent defects insurance?

When the construction of a building is completed, there could be underlying issues that haven’t been picked up on. Failures in materials, design or workmanship can go undetected for months or years – leading to structural defects.

When structural defects appear years after construction is completed, it shouldn’t fall upon the homeowner – who may have had nothing to do with the construction process – to pay and fix the issues, especially if they’re because of poor work, design or materials.

While a latent defects insurance policy won’t prove liability, it can help to cover the costs of fixing structural defects – taking the stress off the building owner. It can also cover the cost of rebuilding a property if required.

Latent defects insurance covers the building for 15 years from the date of the building’s completion certificate.

How much does latent defects insurance cost?

A latent defects insurance policy, like most insurance policies, does not come at a standard price. Instead, it depends on the circumstances surrounding the construction project.

This includes the size of the project, the materials involved, the level of detail in the design, and more.

The main factors that affect the price of latent defects insurance:

• Number, size, and type of building(s)
• Experience level of main contractor/developer
• Construction methods and materials being used
• The rebuild value of the property (sum insured)

Of course, the larger the project, the more it will cost to insure it. The price can be reduced by using reputable builders with a design and materials that comply with building safety regulations.

What is covered by latent defects insurance?

Latent defects insurance can cover the cost of structural defects if caused by poor design, construction work, low-quality building materials or mechanical and electrical services.

Here’s exactly what the insurance policy can cover:

• Fixing structural defects due to poor design or materials
• Fully or partially rebuilding the property because of incorrect building methods
• Repairing damage caused by water ingress due to faulty waterproofing

If taken out by the buyer of an off-plan property, the policy can be tailored to include protection against possible insolvency of the developer or contractor.

Extra cover for bespoke insurance coverage includes:

• Alternative accommodation
• Loss of rent/income
• Mechanical and electrical defects
• Contaminated land cover
• Removal of debris

Latent defects insurance summary

It’s clear that latent defects insurance is beneficial, not only to developers and contractors but also to homeowners.

While its price is not set in stone at a standard rate, latent defects insurance can be tailored to cover your exact needs with optional extras.

It’s valuable for homeowners who discover structural defects years after their property’s construction is finalised. If you’d like to obtain a latent defects insurance policy, simply call 0161 928 8804.