Top 5 Reasons For Buying Latent Defects Insurance? Griffiths & Armour News

Top 5 Reasons For Buying Latent Defects Insurance?

Latent Defects Insurance (LDI) is regularly mistaken solely as an unnecessary additional cost to the project. We frequently come across project managers who dismiss the prospect of LDI, often because of their misplaced trust in a third party’s Professional Indemnity insurances and the limited protection provided by Collateral Warranties.

An image showing a cracked wall

Latent Defects is a worthwhile consideration for your projects and has the following benefits:

  1. Protect against Contractor Insolvency – Should your Contractor go bust during the project or after practical completion, any apparent protection provided by their Professional Indemnity policy ceases. An LDI policy continues to provide protection in event of Contractor default ‘pre’ and ‘post’ practical completion.

  2. Funder Requirement – It is increasingly common for a facility agreement to demand a Latent Defect/Warranty product, to satisfy the project Funder.

  3. Council of Mortgage Lender (CML) Compliant – For developments with residential sales, mortgagees will demand sight of a CML certificate before allowing a mortgage based purchase.

  4. First Party Cover. No legal disputes! – The policy is purchased to protect the policyholder from inherent defect losses on a first party basis. This means you no longer need to pursue costly and lengthy legal action against the project team to resolve the defect.

  5. Fully Assignable to Future Owners – Should the building or unit(s) be sold, then the policy can transfer to future owners, a considerable positive for your negotiations with any future sale.

Griffiths & Armour have a wealth of experience from advice to placement of Latent Defects Insurance for residential (including deposit guarantee), commercial and mixed use projects. We use a variety of markets to cater for the needs of your project.


13-16 March 2018, Palais des Festivals, Cannes, France

Meet with us at MIPIM

We will be at MIPIM 2018 in Cannes, France for the duration of the Conference, and we would be delighted to meet with you to discuss the above in relation to any of your forthcoming projects. Our team will be located in the Riviera Hall on the Invest Liverpool stand R7.G2 Would you like to arrange a time to meet?

Jack Wolstencroft

Jack Wolstencroft
T: 0151 600 2132
E: jwolstencroft@griffithsandarmour.com

Graham De Roy

Graham De Roy
T: 020 7090 1114
E: gderoy@griffithsandarmour.com

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