Structural Warranty

A Structural Warranty insurance policy protects a property from structural defects in design, workmanship, and materials.

A Structural Warranty, also known as Latent Defects insurance or Inherent Defects insurance, is most commonly for a period of 10 or 12 years from practical completion. A Structural Warranty can be issued for most build types, including residential, commercial, mixed-use, social housing, student accommodation and self and custom build.

For all new homes (including newly converted homes) under 10 years old for open market sale, a Structural Warranty will be a mortgage lender requirement. Not all structural warranty providers are accepted by lenders in the UK, therefore before you purchase a Structural Warranty, you need to make sure you will be able to sell the property on completion.

In order to check which structural warranty providers will be accepted by mortgage lenders please review your chosen structural warranty provider against the approved lender list (link) on the UK finance website (formerly the CML).

What is covered in a Structural Latent Defects Insurance policy?

Your Structural Warranty cover provides protection against structural defects discovered after practical completion that causes major damage to the insured property. Typically, this will cover structural defects, that arise in the structure, waterproof envelope, drainage system etc. Site visits also known as technical audits, will be conducted periodically throughout the construction phase to help mitigate the risk of defects occurring following completion for the project.

10 or 12 year Structural Warranty policy small print

Before signing on the dotted line, review the provider’s restrictions which are usually within the small print.

 Typical exclusions from a Structural Warranty and Latent Defects insurance policy include:

• Anything that does not cause major structural damage, such as shrinkage cracks to walls and ceilings, or damp from internal environmental conditions.
• Problems arising through a lack of appropriate maintenance or works commenced/modified after initial occupation.
• Some external works, for instance, steps and paving.
• Any contractual disputes you have with builders.
• Accidental or storm damage, which would be covered by buildings insurance.

 Most Structural Warranty policies will include a Developer Defects period up to a maximum period of two years following practical completion, therefore if any structural defects arise during this period of time, it will be the developer or builder’s responsibility to rectify. The insurer then provides Structural Warranty cover for issues causing major damage for the remaining period of the policy.

How do I choose a structural warranty provider?

When you build a new property, it’s crucial you ensure it has a Structural Warranty in place so you can sell it easily and protect the buyer. But with a range of warranty providers in the market, how do you know who to choose? It’s simple – if available always select a UK based, ‘A’ rated provider, or you risk choosing an unstable company that could leave you uninsured.

In the event of a structural defects claim, it’s your insurer who is responsible for paying – so you need to be confident that they can. An ‘A’ rated insurance company has been and will continue to be, assessed by leading international rating agencies such as A.M. Best, Fitch, Moody’s, and Standard & Poor’s (S&P).

These agencies carry out a thorough assessment of the insurer’s long-term financial strength and its subsequent ability to pay valid claims.

A lower-rated insurer, such as a ‘B’ or ‘C’, is deemed to have a poorer ability to settle claims.

Unrated insurers, on the other hand, do not qualify for a financial strength rating by these agencies, meaning there is no evidence of their ability to pay claims and their long-term stability has not been independently verified by these industry-standard companies.

Also, for any insurers based outside of the UK (rated or unrated), their local regulatory bodies may not also subject their insurers to the same rigors that the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) do in the UK. Many are also not part of the Financial Services Compensation Scheme (FSCS) which can provide some protection to homebuyers if the insurer goes into liquidation.

A number of unrated structural defects providers have gone bankrupt in recent years, leaving customers with invalid warranties and having to pay to replace them at significantly increased costs and developers with impacted reputations for not using a financially secure structural warranty provider from the outset.

Why choose Build-Zone as your structural warranty provider?

Build-Zone has some of the largest ‘A’ Rated capacity available in the market and can cater for 10 or 12-year Structural Warranty policies across the residential, social housing, mixed use, Build-to-Rent, student accommodation and commercial space and can work directly with developers, contractors, architects, engineers, project managers, lenders and other construction professionals, as well as their panel of specialist insurance brokers.

Build-Zone is an Associate Member of UK Finance, meaning all our structural warranties are approved by the majority of Lenders in the UK.

Build-Zone has been providing structural warranties since 2003 and with our years of experience, we have proven our reliability and stability in securing multiple ‘A’ rated insurers and being able to cover builds of more than £300 million, on a full value basis.

 For more information, please select one of Build-Zone’s Structural Warranty products in the panels above.

Technical auditing / technical resources

Our in-house technical services company Build-Zone Survey Services Ltd (BZSS), work closely alongside our Underwriting team to provide the additional technical expertise, as well as managing their national network of approved inspectors, partnered surveyors, engineers and construction professionals that undertake technical auditing inspections throughout the course of construction.

As an alternative to using local authority building control, which ensures compliance with building regulations, BZSS can provide a combined building control and technical audit service through some of their partnered approved inspectors.

 In addition to the above, BZSS can also facilitate complimentary services including air pressure testing, EPC tests, EWS1, Reinstatement Cost Assessments, Clerk of Works, etc.