Builders Warranty, Builder is statutory required to supply 6 year Builders Warranty to cover homeowner if Builder dies, disappears or becomes insolvent e.g. Takes deposit- disappears, defects arise and ‘fight’ occurs. There is an implied 10 Year Warranty period under the ACT.

The Builder is responsible!

Latent Defect Insurance, The Builder is the insured along with homeowner – no liability on the builder, no personal guarantees. Policy Is for 10 Years. In the event of a potential Structural Defect the insurer and NOT the builder is responsible.

10 Years.

Basically the same.

Yes, for up to the 10 years policy limit.

Commercial

$50,000 or 1% of contract value whichever greater

Residential

$5000 or 1% of contract whichever greater

Contract value or $10 million whichever is the lesser.

The process requires that the project be registered before commencement.

Certain Underwriters at Lloyd’s established in 1688 the world’s oldest and most experienced specialised insurer.

The insurer handles the claim and rectification

Houses, renovations, extensions, apartment and office buildings, multi units, townhouses.

Owner Builders, Residential and Commercial Builders, Developers and Home Owners

No. – The Latent Defects Insurance commences after the defects liability period.

No – We take over your legal rights and remedies against anyone who is responsible for the events that led to your claim

As there is no legal fights once the structural defects is accepted, the insurer administrator will quickly act to rectify the defect. It is in their best interest to minimise any potential extra costs.

Owner Builders Latent Defects Insurance protects the Owner Builder while they are living in the home they have built, for structural defects for up to 10 years after completion.

It is transferrable for the 10 year period and in the event of a Structural Defect occurring, the insurer, Lloyds of London has the option of taking action against the person(s) responsible, not you the Owner Builder, you are the Insured. Once accepted, the Insurer will fix the Structural Defect and you are not involved in legal litigation, hassles and cost.

Owner Builder Warranty is a statutory requirement if the Owner Builder sells, it is for the benefit of the purchaser if the owner builder dies, disappears or becomes insolvent in the event of a claimable event. It is a statutory requirement and you the Owner Builder are responsible to fix any non-structural defects (2 years) and Structural Defects (6 Years) of the home bought by the purchaser. It is mandatory in Victoria and Western Australia.

N.B. There is an implied 10 years warranty period. So even though Warranty Insurance has a 6 year period, you are on risk for 10 years and if a structural defects occurred in year 9, then you are required to fix the problem.

Building does not always go to plan, the unexpected does happen and tradies pushed for time do take short cuts which may not become noticeable until years later.

Very cost effective pricing over the 10 year life span of the policy.

It is a Technical Report by an approved inspector noting structural defects that must be rectified before the Latent Defects Insurance can be issued.

No, as the insured you are the party covered and the Insurer has the right to seek who is responsible.

Yes, the policy while in place, activates 12 months after the completion.

Yes, building law cases have found in the affirmative that builders have a 10 years warranty period for which they are responsible above the 6 year Statutory Warranty Insurance period.

No.

Construction and Public Liability Insurance is to protect the builder during construction from damage caused by fire, theft, storm, water, flood, vandalism and from Public Liability claims while Latent Defects Insurance is to protect the premises (eg. Home, office etc) in the event of structural defect occurring after construction has been completed.

Damage due to poor design, workmanship or faulty materials are common causes of defects discovered after practical completion. No matter whether you are an owner builder, developer home owner or builder it makes sense to mitigate the risk with Latent Defects Insurance.