Dean Stritch of LABC Warranty describes what to look for when choosing a warranty provider for your development, including for MMC projects
With a range of options on the market, how do housebuilders and developers choose the cover that is right for their development?
A structural warranty covers latent defects – issues with a building’s construction that cannot be reasonably foreseen – and the period of cover is usually 10 to 12 years. The first thing to note is that not all structural warranty providers offer the same level of cover; some differences may be subtle, others more dramatic. It is therefore important to ensure you are fully protected and supported throughout the build process, while mitigating risk.
A risk management surveyor from a reputable structural warranty provider will look beyond foundations, tolerances and wall ties. As part of a broader commitment to best practice, they will take into consideration the safety and tidiness of a construction site, its general organisation, engagement levels and communication. All the quality measures a housebuilder or developer would look for, and should expect.
Modern Methods of Construction (MMC) is also an ever increasing subject of interest in the industry, but how does MMC affect warranty, if at all? As this area of construction continues to grow in popularity, it is important to know that your warranty provider can support you with any innovative systems you may look to adopt.
Keeping on top of inspection findings, actions and updates on a plot-by-plot basis can be an administrative nightmare. A good warranty provider will make this as easy as possible, perhaps through a digital customer portal, to keep track of progress.
Homeowners in newly built properties need to know where they stand, just as much as those in older homes. A warranty provider will make it clear to all parties what their rights and responsibilities are under the insurance policy. Advice on running-in a new home, knowing the difference between snags and defects – and what to do should the worst occur – should be automatic.
Good providers offer their own dispute resolution service, and some insurance policies will provide alternative accommodation if required, as well as covering professional fees. This all means both the homeowner and developer can enjoy peace of mind.
So, when you get planning permission for your next development of new quality homes, what features should you be looking out for in a structural warranty provider?
Check the size of the organisation – do their inspectors and risk management surveyors have local knowledge to back up their technical expertise? Having local or regional representation can also make them more responsive.
How long have they been trading? Structural insurance is also a niche sector, making it more exposed to market volatility. A more established provider will have built relationships and processes to withstand this.
Check the rating of their insurer – A-rated insurers give you the greatest peace of mind. Larger providers will have a panel of insurers. Given the long duration of the policy, it is important to know they are reliable, experienced and secure.
What technical support and service can they provide beyond risk inspections? Remember that the warranty provider will be working alongside you so how can they support you, for example, with changing Building Regulations or adopting MMC?
Look for insurance policies that meet the specific needs of your developments, as well as the ‘extras’ such as cover for mechanical and electrical inherent defects, contaminated land, debris removal, alternative accommodation, and professional fees which are included as standard.
Dean Stritch is UK sales director at LABC Warranty
WHAT IS A STRUCTURAL WARRANTY AND HOW DOES IT WORK?
A structural warranty covers latent defects and is an insurance policy that ensures any major damage caused by structural defects in the design, workmanship or components of the building, are rectified in the first 10 years from completion. Generally, a structural warranty is split into two periods. The first is the Defects Insurance Period (DIP) – typically this is the first or second year of a policy in which the builder is responsible for
fixing any defects deemed to be a failure to comply with the warranty provider’s standards.
The second is the Structural Insurance Period (SIP) – generally eight years following the DIP – during which time the warranty provider is responsible for dealing directly with any claims. Providing the claim is valid, the provider should then organise any necessary repair work, or pay for such repairs.