Latent defects, and how insurance can help mitigate the risks
The risks associated with latent defects include structural damage, financial loss, and legal liability. Latent Defects Insurance, also known as Decennial Insurance, is used to mitigate these risks. This insurance offers financial protection by covering the cost of repairing or rebuilding a property due to damage caused by latent defects. It also provides legal protection should a latent defect result in a third party making a claim because of injury or damage.
Latent defects: A ticking time bomb?
The challenge that a latent defect poses is that it may take a long time to manifest itself. For instance, if a property is built on insufficient foundations and footings, it may suffer sinking and subsidence further down the line, but it’s likely this will only become apparent months or even years after the building work is finished. Other common examples include:
- Faulty electrical wiring: This could result in fire, electrocution or malfunctioning equipment and might only be evident once the electrical systems are fully operational.
- Structural problems: structural weaknesses appear, such as a sagging roof or cracks in the walls, due to poor construction practices or the use of substandard materials.
- Waterproofing failure: Poor waterproofing can result in water seeping into the building, causing dampness, mould, and water damage.
- Inadequate insulation: If a building is not insulated properly, it could lead to higher energy costs and problems with uneven indoor temperatures. This issue might only come to light once the building is occupied, and the heating or cooling systems are active.
- Plumbing issues: Problems with the plumbing system may go unnoticed until leaks occur, or the system fails to function correctly.
Underlying structural issues – and how to spot them
Regular monitoring and professional inspections can help uncover latent defects early, potentially saving you time and money in the long run. Here are some steps you can take to diagnose potential problems in your property:
- Regular inspections: Conduct regular inspections of your property. Look for signs of damage such as cracks in the walls, ceilings, or foundation, water stains, or issues with doors or windows not closing properly.
- Professional survey: Consider hiring a professional surveyor or structural engineer. These professionals have the expertise to spot potential problems that may not be visible to the untrained eye.
- Post-occupancy evaluation: After occupying the building, keep an eye out for any issues that arise. This could include unusual noises, doors or windows becoming difficult to open or close, or unexplained cracks appearing.
- Maintenance records: Keep detailed records of any maintenance work done on the property. This can help highlight recurring issues that may indicate a deeper problem.
Remember, latent defects can remain undiscovered for years. If you suspect a latent defect, it’s important to act quickly to minimise any potential damage. Consult with a professional to understand your options for repair and potential insurance claims.
Why you may need Latent Defects cover
Latent defects can prove a costly headache for both the property owner and the contractor since responsibility and accountability for the faults aren’t always clear cut. This is why latent defects insurance is so important. It can help cover the costs of repairing damage caused by an undiscovered flaw in construction, protecting contractors and property owners from potentially significant financial loss.
Finally, it’s always advisable to consult with an insurance broker who specialises in latent defects insurance, so you can weigh up the coverage options for your specific needs. This way, you can effectively manage the risks associated with latent defects and protect your investment.
Contact us
If you're concerned about latent defects risks and would like to discuss potential insurance solutions with us, please call: 01622 683913 or email: construction@thecleargroup.com
