A financial rating is an independent evaluation of an insurer's ability to meet their financial commitments (most importantly pay claims). The scale of this rating varies depending upon who provides the evaluation.
The better the financial rating of an insurer the more likely they are to be able to meet any claims. This is particularly important for long tail cover such as our warranties.
If an insurer does not have a financial rating there has not been an independent evaluation of their finances. There is therefore more uncertainty over the ability of the company to meet future claims.
If an insurer cannot meet claims costs then they will be considered in default. Provided they are FCA regulated some of the claims cost will be met by the Financial Services Compensation Scheme. However, this process can be drawn out and greatly delay the claim.
There is more certainty that they will be able to meet claims costs. An insurance policy is a promise to pay in the event of a valid claim; this becomes worthless if the company is unable to keep this promise. If a warranty was unable to pay a valid claim this would reflect badly on the developer.
Latent Defect Insurance is sometimes called Structural Warranty Insurance or Structural Guarantee. Latent Defect Insurance is designed to indemnify the Policyholder against claims discovered in the insurance period. Policies are designed to cover the cost of complete or partial rebuilding or rectifying work to the property which has been affected by Major Damage attributable to Defect in the Design, Workmanship or Materials
In short, to protect your investment, this product does not rely on Architect’s Certificates, Collateral Warranties and Professional Indemnity and it does not require proof of fault, just proof of a defect. Without suitable cover, re-instating a property which has suffered a defect could be a long drawn out and slow process. Having to prove negligence to one or more parties involved in the construction contract and then negotiate settlement could prove costly, but not as costly as suing should they deny liability.
Re-instating a property which has suffered a defect could be a long drawn out process and recovering losses a costly process. Latent Defect Insurance provides you and your customers with the knowledge that if something does go wrong there is a robust solution to keep them running when they need it most. Give Premier Guarantee a call to see how we can help.