How much does industrial latent defects insurance cost?
As a rough guide, around 0.95% of the rebuild cost for a commercial building registered before work starts (with no broker fee on top - we are paid by commission from the provider). Every scheme is priced individually - here is what drives the price and what you pay when.
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- Insurer quotes usually within one working day of your proposal
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- Trade counters to big-box logistics
The rule of thumb
Industrial warranty cost as a percentage of the rebuild cost
Most schemes come out at a percentage of the rebuild cost - what it would cost to build the units again, not their value or the price they will sell for. That figure covers the insurance premium and the provider's technical inspection and administration fees (with no broker fee on top - we are paid by commission from the provider).
For example, a distribution warehouse with a rebuild cost of £8,000,000, registered before work starts, would typically come to around £76,000, and a terrace of trade counter units with a rebuild cost of £1,500,000 to around £14,250 (with no broker fee on top - we are paid by commission from the provider). Minimum premiums may push a smaller scheme higher.
These are indications only, not quotes. The final price is set by the warranty provider once it has reviewed your scheme. Minimum premiums and fixed inspection fees can make a small scheme work out at a higher percentage, and extras such as 12 year cover or optional extensions add to it. Your quotation shows every part of the cost separately.
What affects the premium
What providers price on for industrial buildings
- Rebuild cost - the starting point, as the percentages above show
- Size and number of buildings, and whether the scheme is phased
- Frame and spans - portal frame, large-span or more unusual structures
- Roof and cladding - the systems used, rooflights and roof drainage
- The floor slab - whether it is included and the loads it has to carry
- Ground conditions, including made ground and previously developed sites
- Stage of the build - registering before the start is usually cheapest
- Track record of the developer, the contractor and the design team
- Policy length and extensions, such as 12 years instead of 10, loss of rent or mechanical and electrical cover
What you pay
What an industrial warranty quote is made up of
Every quotation we give sets out each part of the cost separately, so you can see exactly where the money goes.
Insurance premium
The cost of the cover itself, set by the provider or insurer, plus insurance premium tax where it applies.
Technical inspection fees
The provider's charge for reviewing the design and inspecting the building during construction.
Administration fees and our fee
The provider's administration fee, where it charges one. There is no broker fee to pay. We are paid by commission from the warranty provider, which is included in the premium.
When it is payable
Most providers ask for payment when the scheme is registered, before work starts or before cover begins. Some split large or phased schemes into stages. Cover arranged once work is under way is usually paid in full before it is confirmed. Your quotation will say exactly what is due and when.
Example scenarios
How the price changes from one scheme to another
These are illustrations, not quotes - they show why two industrial schemes of a similar size can be priced differently.
A pre-let distribution centre, registered before the start
One large building, one set of inspections and a single certificate. The price is driven mainly by the rebuild cost, the slab and the roof - typically around 0.95% of the rebuild cost (with no broker fee on top - we are paid by commission from the provider). Adding loss of rent for the investor increases it.
A multi-let estate built in two phases
Several terraces of light industrial units, each unit normally certified at completion. A starting point of around 0.95% of the rebuild cost (with no broker fee on top - we are paid by commission from the provider), with the cost spread across the phases as they are registered.
A warehouse where the frame is already up
The provider did not see the ground works or the slab, so it needs records and may ask for more investigation. As a general guide, expect nearer 1.25% of the rebuild cost (with no broker fee on top - we are paid by commission from the provider).
A finished unit that now needs cover to sell
Cover on a completed building is not always available, and depends on a survey and good build records. Where it is, expect around 1.5% of the rebuild cost (with no broker fee on top - we are paid by commission from the provider) - usually the most expensive route.
Ways to keep the cost down
- Ask for terms while the design is being finalised, and register before work starts on site
- Have the ground investigation, structural calculations and roof, cladding and slab specifications ready
- Use systems and details the provider is comfortable with - we can tell you which questions to expect
- Keep dated photographs and test records of the ground works and slab, which are covered up early
- Only add extensions such as loss of rent where a buyer, funder or tenant actually needs them
- Tell the provider about changes early, before they become problems at inspection
Request an indication
Tell us about your scheme and the rebuild cost, and we will give you an indication of what latent defects insurance is likely to cost before you commit to anything.
- Takes under a minute
- Instant reply by email with your reference
- Insurer quotes usually within one working day of your completed proposal
- Sites anywhere in England, Scotland, Wales and Northern Ireland
- Free and no obligation
Already filled in a proposal form? Email it to us or send it on WhatsApp with any drawings you have and we will take it from there.
