What is a Financial Rating?
What is a financial rating?
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.
What does a financial rating mean to consumers?
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.
What if an insurer does not have a financial rating?
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.
What happens if an insurer cannot meet claims costs?
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.
So what is the benefit of placing cover with an insurer with a strong financial rating?
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 Defects Insurance
What is Latent Defect Insurance?
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
Why should I consider Latent Defect Insurance?
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.
What are the consequences of not having Latent Defect Insurance?
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.
At Premier Guarantee we are all about reducing risk; our national network of trained surveyors and 'A' Rated insurers ensure that our customers have complete peace of mind when it comes to their build
The construction insurance world can be a whirlwind of technical jargon & confusing acronyms; to ensure you don’t get overwhelmed by construction insurance terminology, we’ve deconstructed it for you.
Premier Guarantee hold technical quality & accuracy in the highest esteem and are constantly aiming to review and improve our ‘Technical Manual’, with the latest version, Version 12, now released.