Latent Defects Insurance
What is Latent Defects Insurance?
Latent Defects Insurance, often referred to as Latent Defects Insurance (LDI) or Structural Warranty Insurance, is a type of insurance that covers hidden or undiscovered defects in a building or structure that may not become apparent until years after construction is completed.
These defects are usually due to design, workmanship, or material failure that were not detected during the construction process.
Key Features of Latent Defects Insurance:
- Covers Structural Defects: Protects against defects in the buildings structure that could compromise its integrity. If hidden defects in the construction cause damage (e.g., foundation issues, faulty roofing, or defective materials), the insurance covers repair costs.
- Long-Term Coverage: Typically lasts for 10 – 12 years after construction completion, offering peace of mind to homeowners.
- No Need to Prove Negligence: Unlike traditional warranties, policyholders do not need to prove fault; they only need to demonstrate that a defect exits. If a defect appears within the policy period, they can claim coverage directly.
- Protects Homeowners & Developers: Often used in real estate and construction projects to provide peace of mind to property buyers, investors, and lenders.
- Increases Property Value – Having latent defects insurance can make it easier to sell a property, as buyers are reassured that any hidden defects will be covered.
- Reduces Financial Risk – If a structural problem arises, homeowners avoid the burden of costly repairs, which could otherwise be financially devastating.
This type off Insurance is often required by Developers and Commercial Builders, ensuring properties remain safe and habitable over time.
For further details on Latent Defects Insurance and current providers, please contact Action Insurance Brokers on 02 8935 1550.
