What is and isn’t covered by a building warranty?


A building warranty is a type of insurance policy that covers a property for a period of time after it is completed (usually ten years) in case serious structural problems are found that standard inspections did not pick up. There can be some confusion about what is covered by this type of policy, so we’ve outlined the main features below.

What is covered by a building warranty?

A building warranty for a new build property, for example, is usually split into two parts. The first part covers the first two years after completion and covers any finishing defects (snags) that might appear within that period of time. The second part covers the remainder of 10 years after work was completed on the property and covers any major structural defects that become evident in that time. These problems could be due to:

  • Poor design
  • Poor workmanship
  • Substandard materials

A building warranty should be taken out on any:

  • New-build properties
  • Renovations to an existing property
  • An extension added to an existing property
  • A conversion project e.g. commercial premises to residential property

What is NOT covered by a building warranty?

A building warranty will not cover the building or any of its contents from damage or loss due to things such as:

  • Storms or other weather events
  • Theft
  • Fire
  • Accidental damage to the property
  • Criminal damage to the property

This means that the developer should hold a separate insurance policy to provide cover for these eventualities during the build if they wish for this to be covered. Once the property has been sold, it’s the responsibility of the new homeowner to ensure the property and contents, but the building warranty will be transferred to them as the new owners of the building itself.

If the property is leasehold, it still needs a building warranty to protect the owner in the event that structural defects are found in the first 10 years after completion. The chances of serious defects being present but not becoming evident by the end of that timeframe becomes much lower, which is why the policies last for a decade.

Contact us to find out more about building warranties.

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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