Latent Defects Insurance and Performance Bonds (also known as Surety Bonds) are there to protect the owners of new commercial properties from defects discovered after completion and from breach of contract.
Latent Defects Insurance can help to cover the cost of repairs or rebuilding if structural damage appears after the practical completion a new-build or conversion project caused by a defect in design, workmanship or materials.
The damage can be hugely disruptive, costly and complicated, and could have a serious impact on your business.
The security provided by a latent defects policy can encourage investors and accelerate sales and lettings.
Companies in the construction and engineering industries often need to provide their clients with performance bonds (also known as surety bonds) and other third-party guarantees to ensure contractual obligations are met.
There are two types of performance bond:
- On Demand Bonds are rarely used in the UK construction industry, but they are a standard requirement in many international contracts, as well as in the petroleum and power industries within the UK. They are usually provided by banks.
- Conditional Bonds are common within the UK construction industry. Generally issued by an insurance company, payment is usually conditional upon the employer who makes the call proving the amount of loss which he has suffered.
What FOCUS can offer
- There's no need to establish who’s at fault or to prove negligence
- You don't have to wait for slow, complext litigation before repairs can be done
- No restrictions on the number of assignments (passing on to future owners)
- Immediate access to repair funds can minimise business interruption.
As your business grows and develops, your insurance needs will undoubtedly change. FOCUS will work with you to ensure that the exposure and risks faced by your business will be protected, leaving you with complete peace of mind.
To find out more, contact us.