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What is a Structural Warranty?
A structural warranty is an insurance policy that provides protection against defects in construction or workmanship for a period of 10- 12 years after completion. It covers newly built or converted and refurbished residential developments and is also known as Latent Defects Insurance. Find more information on our Structural Warranties page.
Why do I need structural warranty insurance?
The primary advantage of Structural Warranty Insurance is for the end user IE there is no need to establish who’s at fault or worry about expensive litigation costs in the event of structural defect.
In addition, a structural warranty enhances the saleability of the property- a vast majority of mortgage lenders and banks require a structural warranty in place before a mortgage can be provided.
How long does a structural warranty last?
A structural warranty is insurance for the structure of your new home, normally for a period of 10 years after completion.
Do I need a structural warranty for an extension?
If you are building an extension you may not need a warranty but you will need to comply with building regulations to ensure the property is structurally sound. It is always recommended to speak to structural warranty brokers, depending on the type of extension, in order to make sure you have the right coverage before work is started on site.
What does a Building Warranty cover?
A building warranty covers:
- Structural Defects (including foundations, columns & beams, external walls & cladding, external doors & windows, stairs & floors, roof structures)
- Ingress of Water
- Drainage System
- Subsidence, Heave and Landslip
- Threat of imminent collapse requiring remedial works to prevent damage caused by a defect in design, workmanship or materials but not discovered before inception of cover
- Consequential Loss for Non-Structural Elements
- Loss of Deposit / Insolvency
- Removal of Debris & Professional Fees
- Alternative Accommodation
- Loss of Rent Receivable
- Contaminated Land Remediation Expenses
- Physical Health & Safety of Occupants (non compliance with Building Regulations)
What are the Building Warranty Requirements?
Building warranties are insurance policies that provide the residential home or commercial building with a 10 year structural latent defects guarantee in the event of building damage or failure due to build & design inefficiencies.
There are numerous forms of residential and commercial cover including new homes and conversion / refurbishment housing warranties, completed housing warranties, self-build warranties, commercial property warranties along with more specialist warranties for insolvencies and social housing. Building warranty products offer to repair or replace parts of the building that do not perform or function properly or to regulation standards because of a latent defect. Residential warranties are provided to new homes, conversions and major refurbishments.
Can I insure my tools?
If you or your build team use expensive tools during a property build, you’ll likely want to have an insurance policy or warranty that covers damage to tools or equipment. Certain liability insurance policies, such as Contractors all risk insurance, does provide cover for equipment and tools should they become damaged during the building process. It’s important to speak to our expert advisors in order to ensure that your tools are protected.
When is the best time to get a warranty in place if I am planning a build?
Once you have planning permission and before you start work we advise that you arrange the warranty and have it in place two to four weeks before works start. It’s important to contact Buildsafe straight away once you know the exact start date for the project in order to get a quote and the right coverage beforehand for your building works.
How long does it take to get a quotation from Buildsafe?
How is the cost of a warranty calculated?
The cost is a calculation of the build cost and sales value dependent on the rating achieved with the insurer. We gather all the relevant information required in order to provide you with the best coverage for your property or project.
What affects the cost of my building warranty?
There are three main elements that will affect the cost of your warranty:
- The experience of the professional team undertaking the work. Previous projects completed (start and completion dates, size of build, construction methods undertaken)
- Your financial strength (company accounts)
- The size, value, location and construction methods of your development (eg: build cost, sqm of site, where in the country it’s taking place and the construction methods you will employ)
Click here to view other factors that influence warranty costs.
Why do I have to be rated?
Experience with previous successful projects or builds adds value to you as a customer for insurance providers. This means that the more experience you have the better the price we can achieve for you with the insurer.
Can cover be transferred to subsequent homeowners upon sale?
When the home is sold, the remaining term of cover will transfer to the new owner. For example, structural warranties can last up to 10 years from completion. By having this protection in place for re-sale can help to maintain or even add value to the property as the new owners will view the existing cover as a bonus and will not need to source it themselves.
Do I have to have a warranty to sell my new home?
If the purchaser is raising a mortgage against the property, the Bank will insist that there is a new home warranty in place due to building warranty requirements. If you do not have one, it is very difficult to sell the unit.
What’s the difference between an Architect’s Certificate & a Building Warranty?
The 3 key differences are as follows:
- A building warranty is a first-party piece of insurance.
A professional consultant’s certificate is not an insurance product. To make a valid claim, you must prove negligence on the part of the surveyor/company who undertook the inspections.
- A building warranty validity lasts for 10-years from the date of practical completion. A PCC lasts for only 6 years (which is why they are often 40% cheaper because they last for 40% less time)
- A PCC acknowledges that work has been signed off to a minimum requirement and is only accepted by a limited number of mortgage providers and lenders.
As where, with a structural warranty, an independent surveyor will monitor the works and confirm that the work meet a higher standard, as mandated by the warranty provider. The developer and consumer alike, both benefit from assured peace of mind that all major mortgage providers and lenders accept a building warranty.
Would you ever recommend purchasing a Professional Consultant’s Certificate over a Building Warranty?
There have been occasions where we have recommended professional consultant’s certificate as a more suitable solution particularly when it comes to barn conversion. There are instances where insurers view barn conversions as a ‘higher risk’ or in extreme circumstances, will not offer cover at all.
There are a few small, independent architects and surveyors who carry out PCCs in additional to their major business streams. The problem with this option is that you are often a secondary consideration alongside their bigger clients and prioritised projects and you often will not receive the level of service you should expect.
If the property was completed with the last 10 years, can you help with a Retrospective Warranty Cover?
Yes, our Completed or Retrospective Building Warranty covers any new build, conversion or major refurbishment of residential home including (but not limited to) houses, flats, bungalows, barn conversions build in the last 10 years.
Do you provide cover for insolvency?
Yes cover for insolvency is available- please get in touch if you need this.
What is an Escrow? Is there an alternative?
Escrows are essentially a holding tank for money that insurance providers request to cover the value of any defects that may arise in the initial 2 years of cover. This money-holding arrangement is purely to guarantee there are sufficient funds to pay out for any defects in the event the developer/contractor is not around to honor the 2 year defect period. Click here for more information.