Lloyds of London has confirmed its intention to underwrite a new building warranty insurance scheme. The scheme, which is based on a similar model in Britain, hopes to cover around half of the new-build market. Cover under the scheme is intended to last 10 years from completion creating an overlap with the longstop limitation period under the Building Act.
The specific details for this insurance are still being clarified but a representative from Lloyds believes the policy will be commercially attractive for both sides.
There was legislative discussion last year around the imposition of a mandatory home warranty scheme backed by insurance; no action has been taken in this regard. A warranty backed by a third party insurer would be a welcome development for homeowners and councils as a measure to provide additional protection around builder insolvency.
Click here to read an article in the Herald on this new insurance.