The Complete Guide to a Structural Warranty Insurance Policy

When it comes to building or buying a new property, protecting your investment is essential. A Structural Warranty, sometimes called a Latent Defects Warranty or Inherent Defects Insurance, is one of the most important forms of protection you can secure.

It offers long-term peace of mind by covering serious defects in design, workmanship or materials. In this complete guide, we will explain what a Structural Warranty is, why you need one, what it covers and how to choose the right provider.

What is a Structural Warranty?

A Structural Warranty is an insurance policy that covers major structural defects in a property for a period of 10 or 12 years from the date of completion. These defects are typically the result of issues with design, materials or poor workmanship that were not visible at the time of completion. The warranty steps in to cover the cost of repairs if the builder is no longer around or refuses to fix the problem.

Although it is not a legal requirement, most mortgage lenders will insist on a Structural Warranty before they approve a loan on a newly built home. If you plan to sell the property within the first decade, you will also find it nearly impossible without this protection in place, as buyers’ solicitors will require evidence of cover.

Why do you need one?

There are several compelling reasons to invest in a Structural Warranty. Most importantly, it provides essential protection against serious and costly defects that may not become apparent until several years after completion. Whether you are building a new home, carrying out a conversion, or a developer managing a commercial development, a Structural Warranty can save you from unexpected financial burdens.

Mortgage lenders generally require a recognised Structural Warranty from an approved provider. Without it, you may struggle to get finance or sell the property further down the line. Having a warranty in place also reassures buyers, tenants and stakeholders that the building has been constructed to an acceptable standard and that any significant structural issues will be addressed.

How it works

A typical Structural Warranty is divided into two main periods. The first is the defects period, which usually lasts for the first two years after completion. During this time, the builder or developer is responsible for rectifying any issues that arise. If they fail to do so or cease trading, the warranty provider may step in.

The second period, which runs from year three to year ten or twelve (depending on your policy), is known as the insurance period. During this time, the warranty provider covers the cost of structural repairs for latent defects, even if the original builder is no longer available. This long-term protection is what makes a structural warranty so valuable.

What’s covered and what’s not?

A Structural Warranty covers serious structural issues that affect the integrity of your building. This includes foundations, roofs, load-bearing walls, floors, staircases and waterproofing that fails and leads to water ingress. Depending on the provider, detached garages and outbuildings may also be covered.

However, the warranty does not cover everything. Cosmetic defects such as plaster cracks, shrinkage or minor decoration issues are excluded. Damage caused by poor maintenance, weather events or accidental incidents is also not covered, as these are typically the responsibility of your building’s insurance. In addition, a structural warranty does not deal with contract disputes between you and your builder.

Choosing the right warranty provider

Not all Structural Warranties are created equal, so it’s vital to choose a reputable provider. Look for policies backed by ‘A’ Rated insurers, which have been assessed for financial strength and their ability to pay claims. It’s also important that a broad range of mortgage lenders accept your warranty provider.

Build-Zone is one of the leading Structural Warranty providers in the UK. ‘A’ Rated global insurers underwrite our policies, are widely accepted by lenders and are suitable for a variety of developments, from residential new builds to commercial projects and self-builds.

What does it cost?

The cost of a Structural Warranty varies depending on the size, type and location of the property, as well as the level of cover and whether technical audits are included. As a general rule, you should expect to pay around 1 per cent of your build cost. It is best to secure the warranty before construction begins, although some providers, such as Build-Zone, can offer retrospective cover in certain cases, but this will always be more expensive.

Making a Structural Warranty claim

If a defect appears during the defects period (the first two years), the builder is expected to rectify it. If they cannot or will not, then the warranty provider may step in. From year three onwards, claims are made directly to the insurer, who will assess the defect and organise repairs if it is a valid claim under the policy terms.

To make a claim, you will need your Certificate of Insurance and the relevant policy documents. Build-Zone offers a straightforward process for managing claims and provides customer support to help you navigate any issues.

Conclusion

A Structural Warranty is a vital safeguard for anyone involved in building or buying a new home or development. It protects against serious structural defects, ensures lender compliance and gives both owners and buyers peace of mind. While the initial cost may seem like an added expense, the long-term value and protection it offers far outweigh the risk of going without it.

With trusted providers like Build-Zone offering comprehensive cover across residential, commercial and self-build projects, securing a structural warranty is one of the smartest investments you can make in your property journey.

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