Resilience Insurance launches latent defects cover
Managing general agent Resilience Insurance says its new latent defects insurance (LDI) product for high-rise buildings is a “game changer” for the construction industry, which has been affected by widespread reports of failures in design, workmanship and use of inferior materials.
Resilience announced the launch this week and is distributing the cover through its authorised broking partners.
LDI, known also as decennial liability insurance or inherent defects insurance, provides cover for structural defects after a building is completed and is taken out by developers when a project starts.
Resilience says its product covers the property owner for a period of 10 years from the date of occupancy certificate, but declined to provide the name of its underwriting partner when asked by insuranceNEWS.com.au.
“The Resilience Insurance LDI product fulfils the end game of ensuring maximum consumer protection for those property owners and residents of medium to high density residential living,” Resilience says in a statement.
“Assuring quality design and construction before completion of building and before owners take possession, will change the experience of stakeholders.”
NSW has been working to introduce decennial liability insurance to protect apartment owners and a Ministerial Advisory Panel appointed to advise the government on the cover is expected to release its report this year.
Resilience MD Stefan Hicks, who sits on the panel, tells insuranceNEWS.com.au the push for reforms in NSW and other states means “a product like LDI will have sustainability” in Australia.
“The feedback from the industry is very positive because what it does is it allows them to market their off-the-plan properties with a 10-year guarantee against defects,” he said.
SHC Insurance Brokers, one of Resilience’s authorised distributors, says the product availability comes at a time of significant changes in the building industry, as states and territories look to improve construction standards.
“Whether it’s mandatory or not, developers that see this as beneficial to their balance sheet protection will purchase it anyway,” CEO Brett Graves said.
Awareness of latent defects insurance in Australia has grown in the last few years, driven in part by NSW plans to introduce additional protection for consumers, he says.
“These reforms have made developers and builders take note of the benefits this product can provide to their businesses,” Mr Graves said.
“Latent defects insurance protection was first introduced in Europe several decades ago and has spread to most regions worldwide to deal with the issue of post completion defects in all nature of buildings.”
He says SHC Insurance has started to inform its clients about the product and how it can help their business.
