What good reasons are there for buying this expensive insurance cover?

A large town house that is being renovated.

There are a few situations which might lead you to think that the significant cost of structural warranty insurance is a worthwhile investment.

Working with single-use companies
Increasingly, contractors on large projects are starting single-use companies through which to fulfil a project, only to close them down at the end of a project to avoid any long tail liability.

In this situation any warranties provided under the original contract could well be void unless tied to the contractor’s parent company and you as the employer therefore protect yourself against being unable to make legitimate claims against the contractor if their work turns out to be of insufficient quality.

Contractors going into liquidation
The same would hold true were a contractor to go into liquidation in the middle of a contract and an incoming replacement was unwilling to warrant work already completed because they themselves had not undertaken it.

Selling the property during the warranty period
Finally, if it is your intention or indeed a likelihood that you intend to sell the property at any time during the warranty period provided by the contractor the existence or otherwise of that contractor may have a bearing on your ability to complete the sale.

There are a few situations which might lead you to think that the significant cost of structural warranty insurance is a worthwhile investment.

Under present legislation you are required to put together a homebuyer’s pack which would include details relating to any extensive alterations to the property within a given period of time. It may be that an incoming purchaser is unwilling to accept the warranties obtained by you at the time of the project from the contractor.

Structural warranty insurance makes sure that you are able to give a transferable insurance-backed warranty to an incoming purchaser so that any fears they have over the quality of the construction work and the costs of rectifying any defects are ameliorated.