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One Guarantee’s commercial buildings warranty or latent defects insurance works in partnership with property developers and builders involved in non-residential construction projects. Our policy is designed to protect owners of commercial property against certain defects that occur within the structure of a building following practical completion. These structural faults could be very costly to put right, and so having the benefit of a One Guarantee commercial building warranty provides property owners with the peace of mind that the right cover is in place should the worst happen.
For commercial property developers, having the benefit of a structural warranty will not only make a development more attractive to sell or let, it will also remove the risk of liability for any future owners of the property. In some cases, external investment will insist that a comprehensive structural warranty is in place before releasing any funds.
How Does A Latent Defects Policy Work?
Unlike other type of warranties, a commercial Latent Defects policy offers full risk transfer from day one. There is no defects period meaning that cover is provided for the full 12-year period following the practical completion of the build. The only exception is that the first 12 months excludes the discovery of any defective design, workmanship materials, components of the waterproofing elements. Cover is provided for the complete or partial rebuild or rectification of the commercial property to its original specification. Our policy will also cover any damage to the external car parking or roads of the building.
Many commercial builds are covered under a legal arrangement known as a Collateral Warranty. While these continue to be a popular method of protecting commercial property, they can often be unreliable, subject to a number of limitations that could have significant financial implications for a property owner if any defects arise. One Guarantee has put together a comprehensive guide highlighting the key differentials between a collateral and structural warranty. Click here to find out more.
Additional Benefits of Our Policy
- 12-year policy as standard
- Full risk transfer from day one*
- AA-rated Insurer
- Cover for part or completed projects
- Contaminated land cover
- Cover to comply with Building Regulations
- Alternative accommodation, professional fees, debris removal and additional costs
- Instalment facilities available (subject to approval)
- Machinery Inherent Defects Insurance available
*The first 12 months excludes the discovery of any defective design, workmanship materials, components of the waterproofing elements.
- Can You Insure Against Mechanical And Electrical Defects?
Some of the communal elements of the commercial property may not be covered by a latent defects policy. These can include things such as lifts and escalators, electrical distribution systems and air conditioning units. Machinery Inherent Defects Insurance (MIDI) has been designed to address these areas of a build with a policy which will complement our structural warranty insurance. One Guarantee can offer MIDI which is Underwritten by HSB Engineering Insurance. For more information on MIDI, please see our news article.
- What Type Of Commercial Property Do You Cover?
One Guarantee are able to insure all types of commercial build projects throughout England and Wales however big or small. We typically cover developments such as care homes, hotels, industrial units and sports facilities. We also offer extensive cover for commercial buildings as part of mixed developments. For further details, please see our Mixed Development Warranty.
- Can A Commercial Warranty Be Transferred To Future Owners?
Our commercial warranties or latent defects insurance is fully assignable. This means the policy is freely transferrable to any future owners of the property for an unlimited amount of times during the cover period.
- Do I Need To Prove Negligence To Make A Claim?
Unlike collateral warranties, no negligence needs to be proven as to who is responsible for the latent defect. In the unlikely event of a structural fault occurring, our policy will cover the rectification costs provided the defect is insured. We do not require the contractor/builder to be solvent or to accept negligence, a significant difference from a collateral warranty. More information can be found here.