Latent defects insurance

An increasing number of property owners are now considering the use of latent defects insurance to provide protection against defects in buildings that arise following completion of construction.

Defects occur on all construction projects. However, some defects only come to light once the building work has been completed. These are latent defects, see Practice Note: Latent defects.

In normal circumstances, the only recourse that is available to a building owner or occupier in the event of defects arising in their building is to seek recovery from the members of the construction or design team via collateral warranties where these have been provided. A latent defects insurance policy provides either additional protection or alternative protection where warranties cannot be obtained.

A latent defects insurance policy is a material damage first party policy. This means that the owner of the policy can make a claim without

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