Construction is a risky business. Every project is unique, and unique problems will arise, meaning strong insurance cover is vital. Choosing the right policy can be bewildering in terms of process, competitiveness, and in ensuring that the cover you get is sufficiently inclusive. BuildSafe is an experienced specialist who can be your guide, steering you safely through the insurance jungle.
We know precisely what providers – and lenders – will need
Insurance policies of all types require you to submit detailed information as part of the application. But construction cover policies, such as latent defects insurance, are particularly complex, requiring numerous supporting documents. In some cases, these must be completed by specialists whose work needs to be commissioned well in advance. From a properly precise scope of works to the structural engineer’s report that a chartered civil or structural engineer will undertake, we can talk you through exactly what you will need, and when.
The when is important: without expert advice, it’s not uncommon to end up having to pay for expensive retrospective cover. Even those who think they know the process can get caught out, as regulation and industry practice can change quickly. The Council of Mortgage Lenders, for example, previously required Latent Defects Insurance for new build residential projects only, more recently expanding the requirement to all conversions and all commercial properties.
Once you secure cover, you must meet all of the detailed contractual obligations
Industry-standard wording exists for many aspects of insurance. Still, providers often adapt standard wording, adding conditions and endorsements (endorsements are additions to the contract, but can come as early as the initial purchase). If these are not fully understood and followed, a developer can end up with a policy that won’t pay out when they need it.
We understand that one of our most important jobs is turning the legal language into straightforwardly explained obligations, giving you peace of mind that you are fully secure in your cover.
Costs are experiencing a period of unusual flux
Cost comparison in insurance isn’t a simple case of comparing one asking price to another, since each provider will offer different exclusions and benefits. The task is all the harder currently, however, as unusually high inflation is driving up the payouts associated with claims, and causing some insurers to reconsider their fees.
As long as price variation is atypically high, expert advice is even more important than normal in identifying the most competitive policy. We always keep eyes on all of the established providers, assessing not just the headline cost of policies but the details of what each one offers, ensuring our clients get the best cover for them.
Insolvency is making insurers cautious
One of the key reasons people take out latent defects insurance is that it pays out even if the party at fault is no longer trading. There is more risk than ever on that front at present: “There are now on average a dozen building companies going under every single day in the UK. This is an immensely difficult period for the construction sector,” said accountancy firm Mazars, in conversation with The Construction Index.
As well as affecting pricing further, this is causing some insurers to withdraw entirely from offering certain forms of cover, or placing sharper limitations or exclusions in relation to insolvency scenarios. Contract certainty is more challenging to achieve with so much variation in appetite and underwriting criteria, making a knowledgeable partner even more important than usual.
We know the market better than anyone
Policies and services offered vary significantly from provider to provider. Some specialise in particular types of construction project, and others in particular types of risk. In a dynamic market, keeping up to date with the latest options available can be difficult. Using a specialist broker is vital in ensuring you secure the right, comprehensive and competitive policy. The right partner will also ensure you understand clearly the obligations and benefits associated with the fine print of your policy, saving you time and bringing you certainty.
The structural warranties that protect you from latent defects are complex, but don’t let that put you off. With the right advisor, you can have the certainty and protection you need at the most competitive price.
To speak to one of our team, call BuildSafe on 020 3701 0422 today. Alternatively, get in touch using our contact page.
