Ahead of the 2021 Airmic Conference in Brighton next week, HDI global share some valuable insight…
Brexit, supply chain issues and increase demand for large-scale new construction projects has made Inherent Defects Insurance (IDI) more relevant than ever argue Mark Crosby, Senior Underwriter and Chris Loerns, Head of IDI from HDI Global SE.
There has been a real uptick in demand for the erection of new warehousing sheds and distribution centres from the logistics and distribution sector over the last 12 months, partly no doubt following the acceleration of online traffic in the wake of the pandemic. There is also, perhaps paradoxically considering the rise of hybrid working, a flurry of projects underway for new office space, along with the building of student accommodation and private rental property.
All of this development activity certainly comes at an interesting and challenging time – with Brexit, and to some extent the pandemic, impacting not only the availability of skilled labour in the construction and engineering sector, but the supply of raw and specialist materials.
It is against this background that HDI Global has seen an increase in enquiries from developers and contractors for our recently launched Inherent Defects Cover, which provides building owners with indemnity against material damage caused by structural, mechanical, and electrical defects.
As experts in this area, our main advice to clients is really quite simple – get an audit done by one of our external structural engineers, and do it before, rather than after, the build. An onsite audit will check the works carried out matches the actual design, that all workmanship undertaken is up to standard and that the products detailed in the specification are those installed. In the event alternative, perhaps cheaper, materials have to be used due to supply issues, our audits can determine that they are actually fit for purpose.
Another reason for having an audit undertaken early is that if the eventual tenant later demands an IDI policy from the developer – and this is often the case – and this was not carried out at the time, then the cost of cover can be two, even three-times as much.
HDI Global entered the IDI market earlier this year, and are committed to supporting funders, developers, owners, lessors, and lessees with cover that suits their needs. We believe that our policy also perfectly complements and dovetails with our existing and well-established Construction All Risks (CAR) policy, providing real peace of mind for any major build. Taken together we can provide holistic cover for clients from the build through to occupation and use.
IDI cover, which is a long-tail cover with a typical lifespan of 10 years, provides long term reassurance to our clients It also covers the building for the length of the policy, even if it is sold to a different party multiple times.
In the present economic climate IDI cover has an increasingly important role to play. Whilst claims are, fortunately, fairly rare, when they do hit, they are usually very costly, covering basement, warehouse slab and foundation, glazing, and façade failures for example.
To find out more about how we can help you secure peace of mind with any major builds find us at Airmic on Stand 65 or contact us at [email protected] to arrange a meeting beforehand.