×

SEARCH

30 September 2025

The Risks of Unregulated and Unrated Structural Defects Insurance Providers

By Build Zone

Share

By Peter Richardson, Managing Director, Build-Zone

The UK’s structural defects insurance market is under growing scrutiny. More providers are entering the sector, often backed by unregulated or unrated overseas insurers, and many fall outside the protection of core UK consumer safeguard schemes. While greater competition can drive innovation, it must never come at the expense of homeowner security.

The hidden risks behind the policy

In recent years, some structural defects insurance products have been offered by providers that do not meet the standards required by UK lenders or align with regulatory frameworks. At first glance, these policies may appear credible, but if the insurer collapses or fails to honour claims, the homeowner is left exposed.

Some argue that these policies are sold to experienced developers rather than being directly marketed to individual consumers. Yet the reality is that the homeowner ultimately relies on this cover. That means it is no longer sufficient for an insurer to simply be “rated”. To provide genuine protection, insurers must be UK-licensed, and their policies must offer access to the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS). Without this, homeowners are left with no meaningful safety net.

The consequences for homeowners and developers

A serious defect in a property, or multiple systemic defects across a development, can be financially devastating if the policy is not backed by FSCS or FOS protection. The legal and financial burden can even return to the original developer under the Defective Premises Act.

When unrated or unregulated insurers fail, the fallout for homeowners can be severe. Policies become invalid, leaving them unable to sell or remortgage their properties. Many homeowners only discover the issue when it is too late and are sometimes forced into cash sales at below-market value.

Even where the FSCS has stepped in following insolvencies, compensation has typically been limited to only a few hundred pounds, an inadequate sum when structural defects can run into tens of thousands of pounds. The problem is compounded when lenders initially accept such policies without full scrutiny of the underwriter behind the brand.

Moving towards stronger standards

There are signs of positive change. UK Finance is actively developing a more robust set of minimum standards for structural defects insurance. However, until these are fully in place, providers must act responsibly by adhering to regulatory best practice.

Insurers, developers, and lenders all play a crucial role. By working together on a shared definition of what constitutes an acceptable product, the industry can deliver the protection that consumers rightly expect.

Building trust through accountability

At Build-Zone, we are committed to policies that combine reliability with transparency. For us, safeguarding the homeowner is not just a regulatory obligation – it is the foundation of trust in our industry.

As the market evolves, innovation should be welcomed, but it must always be matched with accountability. The consumer deserves protection throughout the full lifespan of a policy, and we must ensure that every provider in the sector is held to that standard.

Discover more on our structural defects policies.

Structural Defects Warranty Policy Quote

Latest NewsPage 5

View from below of tall skyscrapers with glass exteriors, set against a clear blue sky, with two cranes atop one central building.

Commercial Latent Defects Insurance explained

An aerial view of a housing construction site reveals multiple completed and partially built houses, surrounded by fencing and vehicles.

The importance of choosing an A-rated backed Insurer for your New Home Warranty

Aerial view of a row of houses with parked cars, adjacent green spaces, and a river running parallel to the properties.

How do I find the right provider for my New Home Warranty?

Three high-rise buildings under construction with red cranes beside them against a clear blue sky.

Latent Defects Insurance explained

Two construction workers in hard hats review blueprints on a job site. One in orange looks up while the other, in black, observes.

Protecting your building project with a Structural Warranty

A dense patch of green Japanese knotweed plants growing next to an open grassy area with trees in the background.

Using AI to detect Japanese Knotweed

Partially constructed wooden roof frame on top of a building with visible beams and supports against a backdrop of trees.

Snagging lists and Structural Warranties

Houses with solar panels on their rooftops under a blue sky with scattered clouds.

Zero Carbon should be standard for new homes by 2025

Hands surrounding a house structure made of interconnected puzzle pieces under soft lighting.

Why choose a 10 year Structural Warranty?

First Previous...3 4 5 6 7 Next Last

Your new build starts with us.

Useful Links

Build-Zone is a trading style of Sennocke International Insurance Services Limited. Sennocke International Insurance Services Limited is authorised and regulated by the Financial Conduct Authority, No. 309040, and registered in England and Wales, No. 02489110. Registered office: Horizon House, Sittingbourne Rd, Maidstone, ME14 3EN.