Building Users' Insurance Against Latent Defects - Revision history

Designing Buildings at 07:21, 18 November 2020

2020-11-18T07:21:30Z

← Older revision		Revision as of 07:21, 18 November 2020
Line 33:		Line 33:
	* Professional Indemnity Insurance.		* Professional Indemnity Insurance.

−	[[Category:History]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Product_Knowledge]] [[Category:History]]

Editor at 15:24, 26 July 2019

2019-07-26T15:24:51Z

← Older revision		Revision as of 15:24, 26 July 2019
Line 19:		Line 19:
	Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.		Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Betterment.		* Betterment.
Line 28:		Line 26:
	* Commercial landlord and building insurance.		* Commercial landlord and building insurance.
	* Defects.		* Defects.
		+	* Factors affecting property insurance premiums.
	* Insurance.		* Insurance.
	* Latent defects.		* Latent defects.

Editor at 11:43, 20 July 2017

2017-07-20T11:43:56Z

← Older revision		Revision as of 11:43, 20 July 2017
Line 1:		Line 1:
−
	In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against Latent Defects known by the acronym BUILD. The committee that produced the report consisted of distinguished architects, engineers, contractors, property developers, insurers and representatives of government, under the chairmanship of Professor Donald Bishop.		In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against Latent Defects known by the acronym BUILD. The committee that produced the report consisted of distinguished architects, engineers, contractors, property developers, insurers and representatives of government, under the chairmanship of Professor Donald Bishop.

Line 6:		Line 5:
	The essence of such insurance was that it should provide protection for a period of ten years, from the date of practical completion, on the basis that the insurance was a non-cancellable material damage policy against specified latent defects and damage. It was suggested that the cover initially would be limited to the structure, including foundations, the weather shield envelope and, optionally, loss of rent.		The essence of such insurance was that it should provide protection for a period of ten years, from the date of practical completion, on the basis that the insurance was a non-cancellable material damage policy against specified latent defects and damage. It was suggested that the cover initially would be limited to the structure, including foundations, the weather shield envelope and, optionally, loss of rent.

−	The policy was to be taken out by the developer at a very preliminary stage, at least before any work started on the site. The policy would be transferable to successive owners and to tenants of the whole building; in a situation where the whole building was not let to one tenant, the report envisaged that such tenants would be indemnified by the landlord on a back to back basis with the terms of the BUILD policy held by the landlord. There would be a single premium to cover insurance and the necessary risk assessment and verification of the design and construction by independent consultants appointed by the insurer. There was to be provision for inflation in building costs in respect of the cover, and realistic deductibles (excess). A further recommendation of the report was that insurers should waive their rights of subrogation without which, insurers would not be in a position to seek to recover their outlay from the party liable to the developer: for example, the architect, the engineer and/or the contractor. At the time of publication of the report this aspect was of considerable concern to insurers because it would create, in effect, a no fault insurance scheme.	+	The policy was to be taken out by the developer at a very preliminary stage, at least before any work started on the site. The policy would be transferable to successive owners and to tenants of the whole building; in a situation where the whole building was not let to one tenant, the report envisaged that such tenants would be indemnified by the landlord on a back to back basis with the terms of the BUILD policy held by the landlord.
		+
		+	There would be a single premium to cover insurance and the necessary risk assessment and verification of the design and construction by independent consultants appointed by the insurer. There was to be provision for inflation in building costs in respect of the cover, and realistic deductibles (excess).
		+
		+	A further recommendation of the report was that insurers should waive their rights of subrogation without which, insurers would not be in a position to seek to recover their outlay from the party liable to the developer: for example, the architect, the engineer and/or the contractor. At the time of publication of the report this aspect was of considerable concern to insurers because it would create, in effect, a no fault insurance scheme.

	There were three underwriters in the market: Allianz, Norman and SCOR. They were joined by Sun Alliance and Commercial Union in 1989. The indication in BUILD of the premium, including the verification costs, was that they would be of the order of 1.3% to 1.7% of the rebuilding cost. Although a small percentage, the cost in money terms looked substantial; for example, on a £10 million rebuilding cost, the premium would be of the order of £150,000. In addition, there were the fees and expenses of independent design checkers to be paid for.		There were three underwriters in the market: Allianz, Norman and SCOR. They were joined by Sun Alliance and Commercial Union in 1989. The indication in BUILD of the premium, including the verification costs, was that they would be of the order of 1.3% to 1.7% of the rebuilding cost. Although a small percentage, the cost in money terms looked substantial; for example, on a £10 million rebuilding cost, the premium would be of the order of £150,000. In addition, there were the fees and expenses of independent design checkers to be paid for.
Line 12:		Line 15:
	Some developers considered the level of premium, and other fees, a high cost to pay when they were in a position to obtain tenants who were prepared to take the risk on full repairing covenants, with collateral warranties, all free of cost to the developer.		Some developers considered the level of premium, and other fees, a high cost to pay when they were in a position to obtain tenants who were prepared to take the risk on full repairing covenants, with collateral warranties, all free of cost to the developer.

−	On the other hand, if the developer came to sell the building, the fact that there was such insurance might have enabled a better price to be achieved, or alternatively, a sale to be achieved which might not be achieved in the absence of the cover. Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.	+	On the other hand, if the developer came to sell the building, the fact that there was such insurance might have enabled a better price to be achieved, or alternatively, a sale to be achieved which might not be achieved in the absence of the cover.
		+
		+	Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.

	= Find out more =		= Find out more =

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Betterment.	+
−	*Causation.	+	* Betterment.
−	*Collateral warranty.	+	* Causation.
−	*Defects.	+	* Collateral warranty.
−	*Insurance.	+	* Commercial landlord and building insurance.
−	*Latent defects.	+	* Defects.
−	*Latent defects insurance.	+	* Insurance.
−	*Practical completion.	+	* Latent defects.
−	*Professional Indemnity Insurance.	+	* Latent defects insurance.
		+	* Practical completion.
		+	* Professional Indemnity Insurance.

	[[Category:History]]		[[Category:History]]

Designing Buildings at 07:44, 26 July 2013

2013-07-26T07:44:30Z

← Older revision		Revision as of 07:44, 26 July 2013
Line 21:		Line 21:
	*Collateral warranty.		*Collateral warranty.
	*Defects.		*Defects.
		+	*Insurance.
	*Latent defects.		*Latent defects.
	*Latent defects insurance.		*Latent defects insurance.

Designing Buildings at 07:00, 24 June 2013

2013-06-24T07:00:08Z

← Older revision		Revision as of 07:00, 24 June 2013
Line 17:		Line 17:

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
		+	*Betterment.
		+	*Causation.
	*Collateral warranty.		*Collateral warranty.
	*Defects.		*Defects.

Designing Buildings at 05:58, 18 June 2013

2013-06-18T05:58:33Z

← Older revision		Revision as of 05:58, 18 June 2013
Line 22:		Line 22:
	*Latent defects insurance.		*Latent defects insurance.
	*Practical completion.		*Practical completion.
−	*Professional Indemnity ~~Insrance~~.	+	*Professional Indemnity Insurance.

	[[Category:History]]		[[Category:History]]

Designing Buildings at 05:58, 18 June 2013

2013-06-18T05:58:01Z

← Older revision		Revision as of 05:58, 18 June 2013
Line 1:		Line 1:

−	In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against Latent Defects known by the acronym BUILD. The committee that produced the report consisted of distinguished architects, engineers, contractors, property developers, insurers and representatives of government, under the chairmanship of Professor Donald Bishop.	+	In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against Latent Defects known by the acronym BUILD. The committee that produced the report consisted of distinguished architects, engineers, contractors, property developers, insurers and representatives of government, under the chairmanship of Professor Donald Bishop.

−	The report contained an analysis of the risks of building development to the parties involved in it. Among the many points that arose from this report was the recommendation that there should be 'BUILD insurance'.	+	The report contained an analysis of the risks of building development to the parties involved in it. Among the many points that arose from this report was the recommendation that there should be 'BUILD insurance'.

	The essence of such insurance was that it should provide protection for a period of ten years, from the date of practical completion, on the basis that the insurance was a non-cancellable material damage policy against specified latent defects and damage. It was suggested that the cover initially would be limited to the structure, including foundations, the weather shield envelope and, optionally, loss of rent.		The essence of such insurance was that it should provide protection for a period of ten years, from the date of practical completion, on the basis that the insurance was a non-cancellable material damage policy against specified latent defects and damage. It was suggested that the cover initially would be limited to the structure, including foundations, the weather shield envelope and, optionally, loss of rent.
Line 8:		Line 8:
	The policy was to be taken out by the developer at a very preliminary stage, at least before any work started on the site. The policy would be transferable to successive owners and to tenants of the whole building; in a situation where the whole building was not let to one tenant, the report envisaged that such tenants would be indemnified by the landlord on a back to back basis with the terms of the BUILD policy held by the landlord. There would be a single premium to cover insurance and the necessary risk assessment and verification of the design and construction by independent consultants appointed by the insurer. There was to be provision for inflation in building costs in respect of the cover, and realistic deductibles (excess). A further recommendation of the report was that insurers should waive their rights of subrogation without which, insurers would not be in a position to seek to recover their outlay from the party liable to the developer: for example, the architect, the engineer and/or the contractor. At the time of publication of the report this aspect was of considerable concern to insurers because it would create, in effect, a no fault insurance scheme.		The policy was to be taken out by the developer at a very preliminary stage, at least before any work started on the site. The policy would be transferable to successive owners and to tenants of the whole building; in a situation where the whole building was not let to one tenant, the report envisaged that such tenants would be indemnified by the landlord on a back to back basis with the terms of the BUILD policy held by the landlord. There would be a single premium to cover insurance and the necessary risk assessment and verification of the design and construction by independent consultants appointed by the insurer. There was to be provision for inflation in building costs in respect of the cover, and realistic deductibles (excess). A further recommendation of the report was that insurers should waive their rights of subrogation without which, insurers would not be in a position to seek to recover their outlay from the party liable to the developer: for example, the architect, the engineer and/or the contractor. At the time of publication of the report this aspect was of considerable concern to insurers because it would create, in effect, a no fault insurance scheme.

−	There were three underwriters in the market: Allianz, Norman and SCOR. They were joined by Sun Alliance and Commercial Union in 1989. The indication in BUILD of the premium, including the verification costs, was that they would be of the order of 1.3% to 1.7% of the rebuilding cost. Although a small percentage, the cost in money terms looked substantial; for example, on a £10 million rebuilding cost, the premium would be of the order of £150,000. In addition, there were the fees and expenses of independent design checkers to be paid for.	+	There were three underwriters in the market: Allianz, Norman and SCOR. They were joined by Sun Alliance and Commercial Union in 1989. The indication in BUILD of the premium, including the verification costs, was that they would be of the order of 1.3% to 1.7% of the rebuilding cost. Although a small percentage, the cost in money terms looked substantial; for example, on a £10 million rebuilding cost, the premium would be of the order of £150,000. In addition, there were the fees and expenses of independent design checkers to be paid for.

−	Some developers considered the level of premium, and other fees, a high cost to pay when they were in a position to obtain tenants who were prepared to take the risk on full repairing covenants, with collateral warranties, all free of cost to the developer.	+	Some developers considered the level of premium, and other fees, a high cost to pay when they were in a position to obtain tenants who were prepared to take the risk on full repairing covenants, with collateral warranties, all free of cost to the developer.

	On the other hand, if the developer came to sell the building, the fact that there was such insurance might have enabled a better price to be achieved, or alternatively, a sale to be achieved which might not be achieved in the absence of the cover. Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.		On the other hand, if the developer came to sell the building, the fact that there was such insurance might have enabled a better price to be achieved, or alternatively, a sale to be achieved which might not be achieved in the absence of the cover. Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.
Line 17:		Line 17:

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Collateral warranty	+	*Collateral warranty.
−	*Defects	+	*Defects.
−	*Latent defects	+	*Latent defects.
		+	*Latent defects insurance.
		+	*Practical completion.
		+	*Professional Indemnity Insrance.

	[[Category:History]]		[[Category:History]]

Designing Buildings: Created page with " In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against La..."

2013-06-17T18:21:31Z

Created page with " In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against La..."

New page

In 1988, a report was produced by the Construction Industry Sector Group of the National Economic Development Council. The report was called Building Users' Insurance Against Latent Defects known by the acronym BUILD. The committee that produced the report consisted of distinguished architects, engineers, contractors, property developers, insurers and representatives of government, under the chairmanship of Professor Donald Bishop.

The report contained an analysis of the risks of building development to the parties involved in it. Among the many points that arose from this report was the recommendation that there should be 'BUILD insurance'.

The essence of such insurance was that it should provide protection for a period of ten years, from the date of practical completion, on the basis that the insurance was a non-cancellable material damage policy against specified latent defects and damage. It was suggested that the cover initially would be limited to the structure, including foundations, the weather shield envelope and, optionally, loss of rent.

The policy was to be taken out by the developer at a very preliminary stage, at least before any work started on the site. The policy would be transferable to successive owners and to tenants of the whole building; in a situation where the whole building was not let to one tenant, the report envisaged that such tenants would be indemnified by the landlord on a back to back basis with the terms of the BUILD policy held by the landlord. There would be a single premium to cover insurance and the necessary risk assessment and verification of the design and construction by independent consultants appointed by the insurer. There was to be provision for inflation in building costs in respect of the cover, and realistic deductibles (excess). A further recommendation of the report was that insurers should waive their rights of subrogation without which, insurers would not be in a position to seek to recover their outlay from the party liable to the developer: for example, the architect, the engineer and/or the contractor. At the time of publication of the report this aspect was of considerable concern to insurers because it would create, in effect, a no fault insurance scheme.

There were three underwriters in the market: Allianz, Norman and SCOR. They were joined by Sun Alliance and Commercial Union in 1989. The indication in BUILD of the premium, including the verification costs, was that they would be of the order of 1.3% to 1.7% of the rebuilding cost. Although a small percentage, the cost in money terms looked substantial; for example, on a £10 million rebuilding cost, the premium would be of the order of £150,000. In addition, there were the fees and expenses of independent design checkers to be paid for.

Some developers considered the level of premium, and other fees, a high cost to pay when they were in a position to obtain tenants who were prepared to take the risk on full repairing covenants, with collateral warranties, all free of cost to the developer.

On the other hand, if the developer came to sell the building, the fact that there was such insurance might have enabled a better price to be achieved, or alternatively, a sale to be achieved which might not be achieved in the absence of the cover. Furthermore, in times of over-supply of commercial buildings in the market place, it was conceivable that tenants may be more attracted to buildings with such cover than buildings without the cover.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Collateral warranty
*Defects
*Latent defects

[[Category:History]]