Residential and Commercial Developer Services
If you are involved in the construction of residential and commercial buildings, there will be a need to protect your investment against any structural defects occurring. Structural warranties are a standard practice amongst the construction industry and have become part of the requirement criteria for many lenders and funders across the country. They have been designed to give you peace of mind once the build is completed and provide a quick and efficient process for rectifying damage. Who is Premier Guarantee? Premier Guarantee is one of the UK s leading providers of Structural Warranty and Defects Insurance Services and since 1997 have been providing clients with some of the most innovative, competitively priced and above all secure Structural Warranty solutions available on the market. Having arranged cover for over quarter of a million housing units across the UK and Europe, as well as for many key commercial schemes, Premier Guarantee has become the warranty provider of choice for some of the country s leading property developers.
Why should I use a Structural Warranty? A structural warranty (sometimes referred to as a Latent Defects policy) protects individuals, who own and/or live in properties, against faults or defects which could occur in the structure of the property. Most warranties offer cover for the first 10 years of a buildings life (although some can be extended to 12 years). Many mortgage providers and development finance companies require a structural warranty to be in place before releasing funds as it provides certainty that their investment is protected should any defects occur. Structural warranties offer various benefits, including: Peace of mind through 100% risk transfer Regular site inspections to minimise potential defects occurring Additional cover options to protect against issues such as insolvency, loss of rent etc. Do I need to register with you? If you are looking to purchase either a New Homes Warranty or Social Housing Warranty, you will be required to register with Premier Guarantee as a Developer and / or Builder. Please ask your broker to send you a Registration Form, complete all relevant details and return it so we can complete your registration to begin the process. How do I get a quote? Simply complete and return the application form to your broker. Quotations usually take no more than five days to process and should we need any additional information with your application, your broker will contact you to discuss exactly what we need. Please fill out the form as thoroughly as possible to reduce any further requests for information. What affects the cost of my warranty? There are three main elements that will affect the cost of your warranty: Your Developer rating this is calculated using your past experience and claims history, along with any rating scores you have from other warranty providers. Your financial strength this will dictate whether we need to request any additional security from you. The size of your development either the total reconstruction or sale price of your development.
Can I get an indication of how much my warranty will cost? Absolutely. Contact your broker who will be happy to provide you with a quote indication. To calculate your indication we will require some basic information: An overview of your development, such as the number of units you are building and the type of construction you are undertaking. If you are requesting a quote indication on our New Homes scheme, we need the estimated total sale price of the property If you are requesting a quote indication for any of our other schemes, we need the estimated total reconstruction cost of the property. If you are not registered with Premier Guarantee, but are registered with another warranty provider, please have your Developer rating to hand. Types of Conditions There are two main types of conditions: Technical Conditions These relate to the type of development you are building. They could be requests for additional documentation, such as plans, certification or further clarification on aspects of your build. It is important that you provide this information as soon as possible to ensure you do not experience delays in your application. Administration Conditions This can include security in the form of deposits (or escrows) or guarantees. Please note that a full application form must be completed in order for a formal, binding quote to be issued.
Types of Security Each application we receive is reviewed by our underwriters to ensure that the parties involved in the development are in a financial position to meet their obligations under our policy. If your financial accounts, company credit score or trading history does not provide a level of certainty, additional security may be required in relation to insolvency cover during the build period and/or claims during the Defects Insurance Period. There are three types of security we will typically ask for: Parent Company Guarantee This is a guarantee made by a parent company of a Developer under the requirements of our policy and is usually required where the Developer is a subsidiary of a larger company. This document must be signed on behalf of both the parent company and the company that is registered with Premier Guarantee. Cross Company Guarantee This is a guarantee made between ourselves, the Developer and an associated cross-company which is part of the same group of companies as the Developer. This guarantee can be called on should the Developer be unable to fulfil their responsibilities under our policy. This document must be signed on behalf of both the cross-company and the company that is registered with Premier Guarantee. Escrow Deposit This is an amount of money that will be held as a bond in our third party legal advisor s account to be used in the unlikely event of a Developer not being able to fulfil their obligations under our policy. Typically, this is in order for purchasers to reclaim deposits paid, or for work to be completed on site in the event of insolvency. Escrow amounts are calculated based on the rating of the applicant Developer and the number of units to be built in the development. There are two scenarios under which escrows will be retained: 1. If an escrow is required to cover insolvency during the build period, 2. If an escrow is required to cover the Developers responsibilities during the Defects Insurance Period. In scenario 1, escrow amounts will be returned to the Developer once the Certificate of Insurance has been issued on the final unit to be completed on the development. In scenario 2, escrow amounts will be refunded 12 months after the completion of the Developer s period of liability, based on the date of the last Certificate of Insurance issued on the development. In both cases, any interest accrued, calculated at the Bank of England s base rate of interest, will be included in the amount returned to the Developer.
Our Warranties Residential Services New Home Warranty Our New Home Warranty has been designed for house builders building or converting private residential developments. Cover is available for mixed-use developments and includes cover for developer insolvency (subject to status) and alternative accommodation. Social Housing Warranty Our Social Housing Warranty provides Housing Associations with up to 12 years cover on new build developments and conversions. Additional cover is available for loss of rent and our right-to-acquire cover extension means cover on the housing units can be extended to 15 years warranty cover at no additional cost. Simple Completion Premier Guarantee Simple Completion has been set up for any company or individual who is selling completed or partially completed homes which they have acquired through developer insolvency. Simple Completion provides new site owners with the cover they require to meet the criteria of mortgage lenders, allowing them to sell their properties on the private market. Completed Housing Our Completed Housing scheme can provide cover for properties which have been built without the benefit of a warranty in place (subject to scheme criteria). Premier Guarantee for Completed Housing provides cover up to the balance of 10 years so for example, if your property is three years old, you would receive seven years of cover. Stock Regeneration Our Stock Regeneration Warranty provides social housing providers with up to 12 years cover on regeneration projects. Premier Guarantee for Stock Regeneration provides social housing providers with cover for a wide range of building works, including replacement of windows and doors, new roofing works, acoustic conditions improvements, improvements to thermal performance, provision of renewable energy services and changes to building services, including ventilation.
Commercial Services Commercial Buildings Warranty Our Commercial Buildings Warranty has been designed for developers working on commercial projects and mixed-use developments. Our policy includes optional cover for loss of rent and business interruption and provides insurance-backed protection not offered through Collateral Warranties. Some of the benefits of our warranty can be seen here in our comparison table: Using Collateral Warranties as standalone cover for commercial buildings Often obtained as a matter of course from parties responsible for the main construction packages within a project leading to numerous documents being drafted and negotiated Costly legal advice and time to draw up each collateral warranty Assignment not always included Contracts (Rights of Third Parties) Act 1999 (as in force 2000) is able to replace Can be ambiguous and confusing Beneficiary still has to go through courts If a party in the collateral warranty goes into insolvency, there will be no recovery under the collateral warranty Including a Commercial Buildings Warranty as cover for commercial buildings Standard policy and the document insures the building rather than each contractor separately Standard policy set-up for insured parties to use immediately Fully assignable to future parties Commercial warranty can still operate alongside the act Clearly states what is covered 1 st party insurance policy minimises need for policyholder to litigate 1 st Party policy and so cover is for 10/12 years regardless On-going adequate Professional Indemnity (PI) levels need to be maintained and reviewed Insurance backed policy so maintaining PI not an issue
Mechanical and Electrical Insurance Our Mechanical and Electrical (M&E) policy provides customers with protection for a wide range of mechanical and electrical services within their properties, such as lifts, escalators, heating, ventilation, boilers and air conditioning systems. Cover under our M&E policy is available for 5, 10 or 12 years and can also be provided on partially completed and existing structures. Collateral Warranty Insurance (CWI) If a company involved in the collateral warranties on your developments enters into administration, you will be unable to pursue them for damages should any defects occur in the properties you have built. This means you will be liable for carrying out the work needed to repair these defects, the cost of which could run into millions of pounds. To protect the industry against these financial damages, we have developed Premier Guarantee Collateral Warranty Insurance, which provides property developers, who continue to use collateral warranties as their main source of protection, with a contingency cover against the impact that builder insolvency can have on their properties. High Value Scheme As the size of development projects continue to increase, so does the requirement for higher limit structural insurance which can be difficult to obtain. Premier Guarantee s specialist High Value Scheme offering residential, commercial and social housing cover for large single blocks or large scale projects is backed up with all the benefits associated with our standard warranty cover. Our Structural Warranties provide our customers with a range of benefits including: Competitive premiums and interest free payment terms Market leading policy coverage backed by A rated insurers Optional extensions of cover provided to add extra l evel of cover Free technical support Cover often available once construction has started
Building Control (Only available in England & Wales) Our residential and commercial Building Control services have been designed to work in synergy with our Structural Warranty services, providing you with a streamlined, efficient service on site. We will support you from early design stages in offering guidance for complying with Building Regulations and minimising risks from inception. Our Building Control customers all receive: National coverage from our network of surveyors Consistent approach to Building Regulations Competitive rates Free technical advice and support
Our Key Warranty Schemes New Homes Warranty Social Housing Warranty Commercial Warranty Cover period 10 years 10 or 12 years (10 years for High Value Scheme) 10 or 12 years** (12 available if contract under seal) (10 years for High Value Scheme) Defects Insurance Period (Responsibility of Builder / Developer) 2 years 1 year 0 years Structural Insurance Period (Responsibility of Insurer) 8 years 9 or 11 years (9 years for High Value Scheme) 10 or 12 years (10 years for High Value Scheme) Financial Limits Single Unit New build 1,000,000 Single Unit Conversion 500,000 Continuous Structure New build 25,000,000 Continuous Structure Conversion 5,000,000 Single Unit New build 500,000 Single Unit Conversion 250,000 Continuous Structure New build 25,000,000 Continuous Structure Conversion 5,000,000 10,000,000 Financial Limits High Value Scheme Single Unit New build 1,000,000 Single Unit Conversion 500,000 Continuous structure New build 40,000,000 Continuous structure Conversion 40,000,000 Single Unit New build 1,000,000 Single Unit Conversion 500,000 Continuous Structure New build 40,000,000 Continuous Structure Conversion 40,000,000 40,000,000 Excess During Defects Insurance Period 100 During Structural Insurance Period 1,000 During Defects Insurance Period 100 During Structural Insurance Period 1,000 Variable, subject to sum insured Excess High Value Scheme During Defect Insurance Period 100 During Structural Insurance Period 1,500 During Defects Insurance Period - 100 During Structural Insurance Period - 1,500 Cover includes Cover for contaminated land * Cover for Building Control function* Alternative accommodation Additional costs Professional fees Removal of debris Right-to-acquire warranty extension Cover for contaminated land* Cover for Building Control function* Alternative accommodation Additional costs Professional fees Removal of debris Cover for Building Control function* Cover for ingress of water** Cover for contaminated land* Professional fees Additional costs Removal of debris Architect Waiver of Subrogation Rights (for RIBA or CIAT members) Optional Extensions Loss of rental income Insolvency of Builder Seepage Loss of rent receivable Loss of rent payable Business interruption * Cover only available if an Approved Inspector is used on your development. ** Waterproof envelope is covered in years 2 to 10 or 12.
Contact us For further details of our additional schemes, please contact Heron Way Consultants Ltd, 26 Cherington, Yate, Bristol, BS37 8UZ Telephone: 01454 326892 Email: martin@heronwaygroup.com Website: www.heronwaygroup.com
MD Insurance Services Ltd is the Scheme Administrator for the Premier Guarantee range of structural warranties. MD Insurance Services Ltd is authorised and regulated by the Financial Conduct Authority. S&M-1099-2.00-010614