The scheme has been launched by LABC Services, the marketing arm of the District Surveyors Association, which represents all council building control officers.
LABC Services executive director Joseph Grant said the initiative was a direct response to the creation of private sector approved inspectors, who have taken some work from council building control. The cover is only available if local authority officers carry out inspections.
The defects liability policy, called Latent Gold, is half the price of private schemes. Grant said it had a fixed premium of 0.65% of build cost, compared with 1.5-2% elsewhere.
The fixed premium applies to buildings costing up to £10m. Buildings costing more than £10m must be negotiated, but the charge will always be less than 0.65% of the cost, Grant said.
Unlike other schemes, the policy does not require an additional inspection on top of usual building control. “Provided local authority building control is selected on a project, the insurance can be purchased without any further independent inspection,” said William Blumsom, development manager with the scheme’s warranty broker Bland Bankart.
Insurance can be purchased without further independent inspection if local authority control is used
Broker Bland Bankart
The policy, which is backed by Allianz Cornhill, will cover the repair cost of any structural defect in the construction of a building where damage has been caused by faulty design, materials and workmanship. An industry source said the private sector was preparing its response.
The policy automatically protects the contractor and, for an additional premium, all project parties can be covered.
“If the contract is design and build, then for an additional 10% of the premium, the insurers will waive their rights against the contractor for the design of the property,” said Blumsom.
He added that LABC Services is planning a media launch when the scheme lands a major client.
