What Is Latent Defect Insurance?

The field commercial insurance brokers operate in is complex enough that it mystify the average layman or woman, uninitiated in the complexities of commercial cover and policies. The amount of specificities, particularities and technical terms involved in even the simplest commercial insurance procedure is enough to intimidate many newcomers, simply looking to protect their business assets against any eventuality.

This is where commercial insurance brokers come in. By using their expertise to make the process of buying insurance simpler and more straightforward for neophytes, these professionals assert themselves as an essential piece in the commercial insurance market, often serving as the bridge between uninitiated policy buyers and the insurance companies which can provide them with a suitable plan.

One perfect example of what commercial insurance brokers can bring to the table, when it comes to making the complex world of insurance policy buying more accessible to layman clients, is the way in which they take many of the most commonly-used technical terms in the field and strive to make their meaning clearer for those less versed in the field. Here at Watson-Laurie, our professionals certainly find themselves explaining some of the more technical jargon to customers on a regular basis, and we find this helps our clients understand what they are buying and why they are buying it far better than they might have otherwise.

One such term, and one which crops up regularly in the exercise of our functions, is latent defect insurance. This is one of the most specialised services we offer at Watson-Laurie, but precisely because of that, the exact meaning of this expression is often lost on clients just coming into the world of insurance. As such, our expert commercial insurance brokers often find themselves answering a simple question from customers: what is latent defect insurance?

The better to make our customers, both existing and prospective, aware of exactly what this expression means in the context of commercial insurance, we have taken it upon ourselves to come up with a blog post detailing just exactly what latent defect insurance means, as well as why and how it is an important type of commercial insurance for business owners to possess. That attempt can be found in the lines below.

Latent Defect Insurance: A Definition

What is latent defect insurance, then? Simply put, it is a type of commercial insurance which seeks to protect the owners of commercial properties against damage resulting from poor structural planning, workmanship, design or choice of materials during the building’s construction process.

Also called structural warranty guarantee or simply structural guarantee, latent defect insurance differs from other commercial policies in the fact that it does not require proof of fault to be presented when making a claim – simply proof of defect. While these may seem, at first, to be essentially the same thing, they are different enough that that one small nuance represents a significant difference for the property owner. This is because a proof of defect can be significantly easier to obtain than a proof of fault, thereby ensuring the whole process is seen through faster, and the owner indemnified sooner rather than later.

Similarly, a latent defect insurance claim can be made without the need for Architects’ Certificates, professional indemnity papers or collateral warranties. All of these are costly documents, which can not only slow down the claiming process, but also make it costly; by bypassing the need to obtain them, latent defect insurance offers property owners a most cost-effective and time-efficient way of protecting their property against structural damage caused by defects or negligence.

When Does It Apply?

The previous few paragraphs will hopefully have made the benefits of taking out latent damage insurance abundantly clear; however, there still remains the question of what type of structure this kind of plan applies to.

Latent defect insurance most commonly applies to commercial or residential properties, although it can sometimes stretch to encompass less conventional structures, such as car parks. Eligibility tends to vary from one latent defect insurance plan to another, but most insurers are willing to work with the customer to ensure their desired property is adequately covered. As such, it is recommended that clients liaise with insurers when looking to buy this type of policy, to assess the best option to protect their business.

Why Take Out Latent Defect Insurance?

Having answered the question of what is latent defect insurance, and given an overview of the types of structures it applies to, all that is left to do is point out exactly why most commercial insurance brokers recommend business owners take out this type of cover when seeking to insure their business.

Contrary to what more cynical managers may be inclined to believe, this is not simply a ploy for commercial insurance brokers to make some extra commission money; on the contrary, taking out latent defect insurance can have very definite benefits and, conversely, not contracting it could negatively impact a business.

In simple terms, neglecting to take out latent defect insurance could result in significant cost for the property owner, as reinstating a damaged property represents a significant investment both in terms of time and money. Latent defect insurance can at least partly soften the financial blow dealt by this process, as well as give the property owner peace of mind, in the knowledge that a structure is in place for any eventuality. While this type of policy is by no means a one-size-fits-all solution, it can at least be an additional resource or tool in cases of structural damage to a defective structure. This is the main reason why expert commercial insurance brokers, such as those working for Watson-Laurie, usually urge business owners to take out this type of policy when insuring their property.

What is latent defect insurance, then? Quite simply, it is a specialised resource offered by many commercial insurance brokers, and which property owners and managers can make use of to ensure their commercial or residential structures are protected in case a defect should be found which causes damage to the property. Its benefits and the significant financial cushion it can represent in case a problem should arise with the structure make it a recommended purchase for business owners or managers seeking to insure their property as thoroughly as possible.

The field commercial insurance brokers operate in is complex enough that it mystify the average layman or woman, uninitiated in the complexities of commercial cover and policies. The amount of specificities, particularities and technical terms involved in even the simplest commercial insurance procedure is enough to intimidate many newcomers, simply looking to protect their business assets against any eventuality.

This is where commercial insurance brokers come in. By using their expertise to make the process of buying insurance simpler and more straightforward for neophytes, these professionals assert themselves as an essential piece in the commercial insurance market, often serving as the bridge between uninitiated policy buyers and the insurance companies which can provide them with a suitable plan.

One perfect example of what commercial insurance brokers can bring to the table, when it comes to making the complex world of insurance policy buying more accessible to layman clients, is the way in which they take many of the most commonly-used technical terms in the field and strive to make their meaning clearer for those less versed in the field. Here at Watson-Laurie, our professionals certainly find themselves explaining some of the more technical jargon to customers on a regular basis, and we find this helps our clients understand what they are buying and why they are buying it far better than they might have otherwise.

One such term, and one which crops up regularly in the exercise of our functions, is latent defect insurance. This is one of the most specialised services we offer at Watson-Laurie, but precisely because of that, the exact meaning of this expression is often lost on clients just coming into the world of insurance. As such, our expert commercial insurance brokers often find themselves answering a simple question from customers: what is latent defect insurance?

The better to make our customers, both existing and prospective, aware of exactly what this expression means in the context of commercial insurance, we have taken it upon ourselves to come up with a blog post detailing just exactly what latent defect insurance means, as well as why and how it is an important type of commercial insurance for business owners to possess. That attempt can be found in the lines below.

Latent Defect Insurance: A Definition

What is latent defect insurance, then? Simply put, it is a type of commercial insurance which seeks to protect the owners of commercial properties against damage resulting from poor structural planning, workmanship, design or choice of materials during the building’s construction process.

Also called structural warranty guarantee or simply structural guarantee, latent defect insurance differs from other commercial policies in the fact that it does not require proof of fault to be presented when making a claim – simply proof of defect. While these may seem, at first, to be essentially the same thing, they are different enough that that one small nuance represents a significant difference for the property owner. This is because a proof of defect can be significantly easier to obtain than a proof of fault, thereby ensuring the whole process is seen through faster, and the owner indemnified sooner rather than later.

Similarly, a latent defect insurance claim can be made without the need for Architects’ Certificates, professional indemnity papers or collateral warranties. All of these are costly documents, which can not only slow down the claiming process, but also make it costly; by bypassing the need to obtain them, latent defect insurance offers property owners a most cost-effective and time-efficient way of protecting their property against structural damage caused by defects or negligence.

When Does It Apply?

The previous few paragraphs will hopefully have made the benefits of taking out latent damage insurance abundantly clear; however, there still remains the question of what type of structure this kind of plan applies to.

Latent defect insurance most commonly applies to commercial or residential properties, although it can sometimes stretch to encompass less conventional structures, such as car parks. Eligibility tends to vary from one latent defect insurance plan to another, but most insurers are willing to work with the customer to ensure their desired property is adequately covered. As such, it is recommended that clients liaise with insurers when looking to buy this type of policy, to assess the best option to protect their business.

Why Take Out Latent Defect Insurance?

Having answered the question of what is latent defect insurance, and given an overview of the types of structures it applies to, all that is left to do is point out exactly why most commercial insurance brokers recommend business owners take out this type of cover when seeking to insure their business.

Contrary to what more cynical managers may be inclined to believe, this is not simply a ploy for commercial insurance brokers to make some extra commission money; on the contrary, taking out latent defect insurance can have very definite benefits and, conversely, not contracting it could negatively impact a business.

In simple terms, neglecting to take out latent defect insurance could result in significant cost for the property owner, as reinstating a damaged property represents a significant investment both in terms of time and money. Latent defect insurance can at least partly soften the financial blow dealt by this process, as well as give the property owner peace of mind, in the knowledge that a structure is in place for any eventuality. While this type of policy is by no means a one-size-fits-all solution, it can at least be an additional resource or tool in cases of structural damage to a defective structure. This is the main reason why expert commercial insurance brokers, such as those working for Watson-Laurie, usually urge business owners to take out this type of policy when insuring their property.

What is latent defect insurance, then? Quite simply, it is a specialised resource offered by many commercial insurance brokers, and which property owners and managers can make use of to ensure their commercial or residential structures are protected in case a defect should be found which causes damage to the property. Its benefits and the significant financial cushion it can represent in case a problem should arise with the structure make it a recommended purchase for business owners or managers seeking to insure their property as thoroughly as possible.