Do you need a structural warranty?

Whether you’re a contractor or developer in charge of a construction project, you should obtain a structural warranty.

When constructing a building, whether it’s a new build, a conversion, or a renovation, ensuring its structural integrity is crucial not only for safety but also for the long-term value of the property. As a developer, it’s essential to be proactive about safeguarding your investment. One of the best ways to protect both yourself and your tenants is by obtaining a structural warranty. This insurance policy covers potential latent defects that may arise after construction has been completed, helping mitigate the financial risks associated with unforeseen structural issues.

ABC+ Warranty is a specialist provider of structural warranties, offering developers comprehensive coverage for their construction projects. Below, we’ll explore what a structural warranty is, what it covers, and why it’s a critical component of your construction project.

What Is a Structural Warranty?

A structural warranty, sometimes referred to as latent defects insurance, is an insurance policy that offers protection against structural defects in a building, whether it’s a new build, a conversion, or a renovated property. Essentially, it’s designed to cover the costs of repairing structural issues that could arise as a result of poor workmanship, substandard materials, or design flaws that were not initially apparent during construction.

These defects may not become evident until several years after the building is completed, which is why a structural warranty is vital. It provides peace of mind by covering the repair costs for structural damage or issues that could affect the building’s safety or value.

Typically, a structural warranty lasts between 10 and 12 years from the date the Building Control Completion Certificate is issued.

What’s Included in a 10-Year Structural Warranty?

A 10-year structural warranty provides comprehensive coverage, protecting you from many potential problems that may arise with the property. Here are some of the key inclusions:

1. Rebuilding Costs: If the building experiences significant structural defects, the warranty can help cover the costs of rebuilding the property or repairing substantial damage caused by these defects.
2. Water Damage: If water damage occurs due to issues with the original design, construction materials, or workmanship, the warranty will cover the cost of repairs.
3. Drainage Problems: If there are faults with the drainage system that affect the building, the structural warranty will cover the cost of repairs and rectification.
4. Developer Insolvency: In the unfortunate event that the developer becomes insolvent, the structural warranty can help protect you from financial loss.
5. Defects Within 24 Months: For up to 24 months after practical completion, the developer or contractor is responsible for rectifying defects. After this period, the warranty takes over for any structural issues that may arise.
6. Contaminated Land: If contaminated land is discovered during or after construction, the warranty may cover the costs of remediation.
7. Alternative Accommodation: In case the building becomes uninhabitable due to structural defects, the warranty may cover the cost of alternative accommodation for the tenants or owners.
8. Debris Removal and Associated Fees: Costs for clearing debris from the site and associated professional fees can be covered under the warranty.

What’s Not Included in a Structural Warranty?

While a structural warranty offers significant protection, it doesn’t cover every situation. There are some exclusions to be aware of:

1. Alterations to the Building: If defects occur due to changes or alterations made to the property after construction, these will not be covered.
2. Poor Maintenance or Neglect: If defects arise from the building not being properly maintained or due to neglect or misuse by the building owner or tenants, the warranty will not cover these issues.
3. Pre-existing Defects: If defects are discovered that the developer or contractor was aware of prior to completion, these will not be covered.
4. Radioactive Contamination: The warranty does not cover damages caused by radioactive contamination, as these are typically handled by separate, specialized policies.
5. Natural Settling or Subsidence: Issues related to the natural settling of the building or subsidence of the ground are usually not covered.
6. Toxic Mould or Vermin: While structural warranties provide protection against significant structural damage, they do not typically cover damage caused by mould, pests, or vermin infestations.
7. Wear and Tear: Like most insurance policies, the structural warranty does not cover the gradual wear and tear of a building over time, as this is considered part of the natural aging process.
8. Defects in the First Two Years: During the first two years after practical completion, any defects that arise will generally be the responsibility of the developer or contractor. After this period, the warranty covers the costs of repairs.

Should You Get a Structural Warranty?

While obtaining a structural warranty is not legally required under UK building and planning regulations, it is highly recommended for all developers. Not only does it offer financial protection against potential future defects, but it also serves as a strong selling point for potential buyers or tenants.

Here are a few key reasons why a structural warranty is essential:

1. Mortgage Approval: Most lenders require that a property has a structural warranty before they will approve a mortgage. This is particularly important for newly built or converted properties, which are considered higher risk without such coverage.
2. Ease of Sale: If you’re planning to sell the property, having a structural warranty is essential. Properties under 10 years old without a warranty can be much harder to sell, as potential buyers will likely be concerned about the financial implications of unforeseen repairs.
3. Peace of Mind: A structural warranty offers long-term peace of mind, knowing that you’re financially protected should any serious structural issues arise after the building is completed.
4. Developer Protection: For developers, a warranty reduces the risk of financial loss due to unexpected defects that might otherwise cause disputes, legal action, or damage to your reputation.
5. Commercial Projects: If you’re developing a commercial property, most lenders and investors will expect you to have a structural warranty in place before commencing construction.

Obtain a Structural Warranty from ABC+ Warranty

Choosing the right provider for your structural warranty is crucial to ensuring that your property is adequately protected. ABC+ Warranty specializes in providing comprehensive structural warranties that offer extensive coverage for a range of building issues. Whether you’re constructing a residential or commercial property, ABC+ Warranty can help safeguard your investment and provide you with the security you need.

To find out more about how ABC+ Warranty can help you with your project, get in touch with one of our expert advisers today. Ensure your construction project is protected with a reliable, trusted warranty that offers you long-term financial security.