Latent Defects Insurance

What is latent defects insurance?

During the construction phase of a building, loss or damage is normally insured under an “all risks” contract works insurance policy. Following completion of construction, a property “all risks” policy is usually arranged; however, this policy does not provide protection for damage arising out of an inherent or latent defect in the building.

Latent defects insurance (LDI) provides cover in the event of an inherent defect in the design, workmanship, or materials becoming apparent in the structure or waterproofing envelope of a building resulting in physical loss or damage. It can help indemnify you for the cost of the repairs to or replacement of damaged property and/or help pay to prevent imminent further damage caused by a defect up to the total sum insured, typically the full reinstatement value. Cover can be arranged for new buildings and significant extensions to or conversions of existing buildings.