LABC Launches New Insurance Scheme (02/03/2011)
LABC working together with LABC Warranty has launched a new latent defects insurance scheme for non-residential buildings.
This 10-year first party policy is designed for developers of commercial or mixed use developments when used in conjunction with their new homes scheme, and features 100% full risk transfer. This reduces the need for collateral warranties and is assignable to future owners of the property. This new scheme appeals to a large range of development types including: offices, retail, hospitality, health, education and public buildings.
The warranty provides the cost of rectifying works, partial or complete re-building where a property has suffered major damage as a result of defects in design, workmanship, materials or components. Cover also includes reasonable cost of repairing, replacing or rectifying any destruction or physical damage to the external car parking and roads within the property insured; this is only in respect of unsafe access and/or water logging.
Paul Everall, LABC Chief Executive, comments on the new launch.
"We want to add latent defects insurance for mixed use and non-residential buildings into our portfolio. Local authority building control teams devote a great deal of time to non-residential work and we have many customers who find that the old system of collateral warranties is no longer reliable. Banks and financiers are more risk averse and insolvencies have destroyed the old approach, so latent defects insurance makes far more sense. It is direct insurance, easy to arrange and affordable. We strongly believe that local authority customers will increase their uptake of this. And again, it is only available to developers using local authority teams."
The scheme complements others in LABC Warranty including: new homes, social housing, completed housing and self-build and is operated by MD Insurance Services Limited. The insurance is underwritten by AmTrust Europe Limited.