Advice on Project-Specific Latent & Inherent Defects Insurance

What is a latent defect insurance policy?
Latent defects insurance is a form of insurance taken out in respect of specific new-build premises to provide cover in the event of an inherent defect in the design, workmanship or materials becoming apparent after practical completion.

What is a latent defect in a building?
A Latent Defect (or Inherent Defect) is a fault in the property that could not have been discovered by a reasonably thorough inspection before the completion or sale of building structure.

Are latent defects covered by warranty?
Latent defects and any physical damage or loss arising out of or caused by latent defects are covered only if there are no warranties, guarantees or other insurance covering the latent defect or such damages or losses.

How long does latent defects last?
Liability for latent defects will continue for a period of five years after the final completion certificate is issued and at common law a further three years thereafter.

Who is responsible for construction defects?
There may be several responsible parties, but generally the responsibility will lay with the general contractors, developers, and the builders of residential structures even if the work was performed by subcontractors or if the defective materials used in construction were manufactured by others.

What is the limitation period for professional negligence?
If court proceedings are to be issued, they must be brought within certain time limits or the professional will have a strong defence that the claim has been issued out of time. The applicable limitation period in most professional negligence cases is six years from the date of the negligence.


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Contact Declan on 01-845 4361 or email

ERM Financial Services

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