A Commercial Structural Defects policy can add tremendous value to a small to medium commercial builders’ insurance program and potentially protect them from severe financial stress. There are a range of issues that can force a builder into bankruptcy.

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These include:

• Cracking of a warehouse concrete slab requiring reconstruction of the slab;
• Deterioration in the fixing points of tilt slab factory walls requiring rectification and/or replacement;
• Collapse of a roof structure due to insufficient reinforcement or design;
• Incorrect specification of the concrete poured or the mortar used on block wall construction;
• Movement or heaving in a slab due to incorrect design/construction of the footings; and
• Concrete cancer caused by deterioration of the steel reinforcement.

These are but some of the examples of building defects that could be protected by a Commercial Structural Defects policy.

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BRIC is currently one of the few providers in the market with direct access to this type of policy. Our long standing relationship with Liberty allows us to provide you with competitive Australia wide coverage. 

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What are structural defects?

A structural defect includes internal and/or external load bearing structures essential to the stability or strength of the building and can include foundations, floors, roofs, columns and beams, and any other works designed to add strength or support to the building which forms part of the external walls and roofing of the building. 

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How does a Commercial Structural Defects policy work?

The policy protects the builder in the event defects prevent the use of the building OR any part thereof, either imposed by regulatory authority or by collapse or imminent threat of collapse or destruction of the building OR any part thereof, which is discovered after the Completion Date.

A traditional policy will provide you with annual cover, however a CSD policy can provide cover for works completed up to 10 years ago. 

As this is a claims made policy and it is unique in the insurance industry, you are required to continually purchase the policy to maintain cover and provide retrospective insurance. This means the first-year policy covers work done in the first year. The second-year policy covers work done in both the first and second year, and so on. Once you have purchased ten policies continuously you will have ten years’ worth of protection.

The premium is based on the total value of commercial turnover where there is a structural component to the works and all the work you have completed during the time when you have purchased this insurance must be examined. 

Due to the claims made nature of this product, the frequency of claims is lower than other insurance products. The cost of rectifying a defect can be millions of dollars, so there is a strong case for having this cover in place, as the benefits can greatly outweigh the premium cost. 

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With you all the way

To find out more about Commercial Structural Defects policies, please reach out at any time. 

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Chitra Sharma

Team Leader - BRIC Builders

insurance@bric.com.au

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