Protect electrical and mechanical systems in your new-build project with LABC Warranty
Modern buildings are more complex than ever, with up to 40% of construction costs relating to electrical and mechanical services that support and operate within them(1).
Defects caused by poor design, materials or workmanship that lead to problems or damage can cause significant disruption to both occupants, managers and owners.
Previously, contractors may have provided collateral warranties as cover. But with insolvencies in the construction industry running at over 3,100(2) a year in England and Wales – even before the coronavirus pandemic – they could be unreliable, and costly to enforce.
The alternative is LABC Warranty’s Machinery Inherent Defects Insurance cover, provided by our insurer HSB.
What is Machinery Inherent Defects Insurance?
Available for five years from the completion of new-build homes, private rental properties, social housing and commercial buildings, our Machinery Inherent Defects Insurance (MIDI) cover gives occupants, owners, investors and housing associations peace of mind that electrical and mechanical systems are protected.
Under MIDI cover, damage caused by inherent defects will be repaired, or the cost of repairing, replacing or rectifying affected equipment will be met, subject to the terms of your policy.
New mechanical and electrical fixed service equipment which forms a permanent part of the development for the proper functioning of the property is covered. This includes:
- Space heating, ventilating, air conditioning, and water heating systems including boilers and calorifiers
- Lifts, escalators and mobility apparatus
- Lighting and electrical distribution systems
- Building security and environmental control systems
- Electrical and mechanical parts of water pumping, distribution and waste systems
- Internet-enabled or “smart” systems included in the list above would be covered
It doesn’t include:
- Freestanding household appliances, such as a washing machine
- Computer programs, electronic data and codes, software and data storage materials
- Property perils (for example fire or water damage)
- Intentional overloading, testing, experiment or deliberate misuse of equipment
- Wear and tear or any known fault at the start of the period of insurance
How does it work?
The MIDI cover comes as part of the relevant LABC Warranty policy, included as standard in our New Homes, Private Rental Sector (PRS), Social Housing and Commercial products.
During the build and as part of our risk management approach to surveying, projects benefiting from MIDI cover are subject to a technical audit. Designs and specifications are audited and inspections take place throughout the installation period to ensure that quality is maintained.
The cover starts from the date of your LABC Warranty Certificate of Insurance and lasts for five years.
What are the benefits of a warranty policy that includes MIDI cover?
LABC Warranty MIDI cover gives you the convenience of structural, mechanical and electrical inherent defect cover in one policy:
- No need to rely on collateral and professional indemnity insurances
- Fully transferable cover to future owners, subject to the cover duration
- Makes funds available for repairs following the discovery of a relevant defect
- Developments easier to sell or rent thanks to the added peace of mind for occupiers
Interested to learn more? Request a call back from one of our sales team on 0800 183 1755.
(1): HSB “Equipment risk solutions for newly-constructed and refurbished buildings” 2020
(2): Per The Insolvency Service statistics, published 30 October 2019.
Please Note: Every care was taken to ensure the information in this article was correct at the time of publication. Any written guidance provided does not replace the reader’s professional judgement and any construction project should comply with the relevant Building Regulations or applicable technical standards. However, for the most up to date LABC Warranty technical guidance please refer to your Risk Management Surveyor and the latest version of the LABC Warranty technical manual.