The Building Warranty Market
Well, what an interesting time to be a specialist in the “Latent Defects” and “Insurance Backed Guarantee” market.
Two years ago, insurers were falling over themselves to take on these types of policies. Availability of cover was widespread, costs were low and policies easy to obtain. Then we saw a few seismic changes:
- The withdrawal of AMtrust from the market, backing numerous warranties
- The withdrawal of Canopius at Lloyd’s from the market, backing numerous warranties
- The withdrawal of Evolution and Elite from the market
- The collapse of the CRL Warranty, resulting in an already constricting market being inundated with thousands of new risks.
The effect of all of this was to significantly reduce the availability of policies. Developers and contractors suddenly went from a position where warranties were easy to obtain, to a position where they are not. Developing a property without an affordable warranty is catastrophic for a developer. The result of this is properties being built without warranties which are very difficult to sell, or at least difficult to sell at a reasonable price.
What You Can Do
So, what do we recommend:
- Do not take the availability of a warranty for granted – plan early
- Work with a specialist broker familiar with the market conditions (ie BLG!)
- Ideally put a warranty in place prior to commencing work
- Employ financially strong experienced contractors
- Develop long term partnerships that can help you through a challenging market
You may be struggling to obtain a warranty through your usual routes, so contact us and we will be happy to help. Differentiate yourselves from companies that are struggling to secure building warranties. Plan, work with a specialist, secure a warranty early.
This is what we do.