Latent defects insurance is one of the few commercial lines that's effectively non-negotiable for property developers, because the mortgage market itself requires it.
Latent Defects Insurance (LDI), also known as Structural Warranty or Inherent Defects Insurance, covers hidden structural, design, or material defects in a new-build or converted property that only become apparent after construction is complete.
Why this isn't optional in practice: Nearly all UK mortgage lenders require a recognised structural warranty before they'll lend on a new-build property, without one, buyers can struggle to secure financing and developers can struggle to sell. This applies to residential and commercial developments alike.
Most policies run for 10 to 12 years from practical completion. Under the Building Safety Act 2022, post-completion cover was extended to 15 years from the completion certification date, a significant change for property owners.
Traditional collateral warranties depend on the continued trading and PI cover of the original contractor or designer, if that firm goes out of business, the warranty becomes worthless. Latent defects insurance doesn't rely on pursuing the original contractor, insurers respond directly, without needing to establish fault first.
Property developers, housing associations, commercial developers, and increasingly self-builders and those undertaking significant extensions or conversions.
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See My Cover Options →Cover terms vary by insurer and whether the scheme is Council of Mortgage Lenders approved. Always confirm lender acceptance before purchasing.