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Defects warranties and guarantees have always formed an important part of risk management on new-build commercial projects. Ensuring the defects insurance complement the contractual warranties is crucial in providing maximum protection to owners, funders, and future purchasers. At BLG, we have unrivalled experience in ensuring insurance protection benefits developers, funders, and owners. 


An interesting, and of course key, element of the construction of these buildings is their scale. Though the construction methods themselves are generally fairly standard and traditional, the size of the buildings is the real challenge.

Huge open spaces are required to maximise the storage and access capabilities within these properties, with lengthy roof spans and internal supports kept to a minimum. This presents an interesting challenge to project managers and architects, which is now a well-tried and tested feature of these buildings with which we are familiar.

Providing 10- and 12-year Latent Defects Insurance (also known as Inherent Defects Insurance) forms a key part of any project and gives peace of mind to future occupiers who do not want lengthy disputes and issues in the event of a defect. They want it remedied quickly, and these occupiers tend to be large, blue chip household names with a very thorough approach to risk management, which specifies this type of insurance be in place.

Funders & Pension Funds

The traditional method of dealing with structural and weatherproofing risks is contractual, through collateral warranties. Latent defects insurance impacts significantly on the scope of such warranties. Once the property has been completed, the liability for building, developing, or designing the property does not cease. Latent defects insurance is designed to transfer the ongoing defect risk to an insurer rather than being retained by the parties involved. 

Loss of Income

Importantly, such a policy can also include loss of income due to a defect, providing security for all involved. Most businesses obtain business interruption insurance to cover events such as fires, floods, and so on, but you should also consider including this coverage in your latent defects policy. We can help with this.

Contact one of our specialists today, we will be happy to help you.

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