What is latent defects cover for a new house?

How it works in Ireland

A latent defect is a hidden fault in the original construction that becomes apparent later. Latent defects cover, also called structural defects insurance, can pay for resulting damage once the house is complete. It is separate from the building or contract works policy that protects the site while you build.

It is not the same as a certificate of compliance. Certificates under the building control system record that professionals inspected and certified the work. They are not an insurance policy, and they do not pay anything if a defect appears.

Products and eligibility differ. A policy marketed to builders does not show that a one-off self-build can buy it. Some policies need registration before work starts and inspections during the build, so a self-builder who thinks of it afterwards may be too late.

What to ask

Ask your lender whether cover is a condition of the loan, and which providers it accepts. Ask any provider in writing whether your project is eligible, when you must register, which inspections are required, what the thresholds and exclusions are, and whether a later buyer can take over the remaining cover. Ask your solicitor how the cover interacts with your builder’s contract and what other legal remedies you would still have.

A common mistake

Assuming that a defect always leads to a payout, or that a completion certificate stands in for a policy. Read the policy definitions and exclusions before relying on it, and keep the documents it asks for with your completion paperwork.

When a claim is made, the insurer will ask when the house was finished and which documents you hold. Keep the completion certificates, the policy schedule, inspection reports and the builder details together, because they speed up any claim and help a future buyer see what cover remains.