The First Latent Defects Insurance in Australia
For the first time in Australia, SHC has secured a Latent Defects Insurance that transfers the risk and associated costs of repairing building defects to the Insurer.
With the media coverage of building defects of Opal Tower and Mascot Tower, both in Sydney hitting the headlines, the true cost of hidden defects are now being exposed. To date, there has been tens of millions of dollars spent on the rectification of the defective work at both premises. These are just two examples of the costs and pressures hidden defects inflict on all stakeholders; developers, builders, professional services and consumers alike. The Opal Tower unit owners have now filed a class action lawsuit against the NSW Government under the Home Building Act sighting the site was not built with ‘due, care and skill.’
Latent Defects Insurance in a snapshot
✓ Cover up to $10m per project (more on application).
✓ Cover up to 10 years.
✓ Retrospective cover upon application.
✓ Indemnity costs also covered, such as accommodation expenses.
✓ Builder held harmless – (no liability).
✓ High Rise and Low Rise.
✓ Commercial or Residential Properties.
✓ Australia Wide.
Why Should Developers Buy This Insurance?
This is the perfect product to add for Developers as it gives potential buyers increased peace of mind and security – resulting in faster and increased sales. In this environment of the media and consumer groups informing potential buyers of the future dangers of hidden and latent defects in buildings, particularly high rise, any value-added product should not be ignored. If you are selling units at a site, and your competitors are offering 10 years of Latent Defects coverage to purchasers, you may find your units will sell slower and perhaps at a lower price. For a small unit investment to take out this insurance policy, it will undoubtedly add value to your sales.
Why Should Builders Buy This Insurance?
It’s a no brainer; for a small amount of premium you are transferring the potentially considerable cost of rectifying future Latent Defects from your balance sheet and cashflows to the Insurer. It's an investment that should be made to protect your financial position and future profits. Especially if you are a Director/Shareholder that is looking to retire within the next 10 years, this insurance is a must to avoid unnecessary exposure to future financial risk and loss. Even if the property has Home Warranty insurance, the cover is limited to a maximum of 7 years and its capped at considerably lower levels of pay-out. Be sure, be insured with Latent Defects Insurance.
Don’t be caught out ever again without purchasing this insurance from SHC Insurance Brokers – please use the Link below to register your interest in Latent Defects Insurance or call Brett Graves (Director) on 0404 870 773 or 1300 550 665.
