Latent Defects Insurance

Complete cover for structural defects on commercial buildings

Cover Built for the Way You Work

Latent Defects Insurance (LDI) is a first resort policy that covers loss or damage to Class 2 buildings, caused by a major defect in design, materials, or workmanship.

COVER FOR

Developers

Commercial builders

What is Latent Defects Insurance?

Cover Period: 10 years

LDI provides cover for structural defects after a building is completed and is taken out by developers when a project starts.

The trigger for a claim would be the discovery of a major defect. The claim would be made by the property owner.

Latent defects cover allows the developer and/or builder the ability to provide a 10-year major defect guarantee. Supported by this additional insurance protection the developer is in a stronger position in selling LDI insured property units by virtue of the additional value they can provide to potential purchasers. It symbolises that the developer is trustworthy and has passed the quality examination through the insurer’s quality assurance processes.

Why would a Developer or Builder be carrying out Class 2 building need LDI?

There has now been a formal announcement from the NSW State Government for Latent Defects Insurance to be utilised as an alternative instrument to the costly, and often ineffective Strata Defects Bond.