Established in 2001, International General Insurance (IGI) is a global privately-owned specialist commercial insurer and reinsurer. Our vision is to be the company of choice for clients and brokers through market-leading service and our reputation for stable management and capital security.
A diverse and highly experienced team of underwriters operates our office in London. We also have offices in Dubai, Amman, Casablanca and Kuala Lumpur.
Our diverse portfolio of specialty lines includes Energy, Property, Construction & Engineering, Ports & Terminals, Financial Institutions, Aviation, Professional Indemnity, Political Violence, Legal Expenses, D&O, Casualty, Forestry and Treaty Reinsurance.
Standard and Poor’s upgraded our financial strength rating to “A- “, with a Stable outlook. A.M. Best rated the company A- (Excellent), with a Positive outlook, stating, “the revised outlook reflects IGI’s consistent record of very strong operating performance and the continuous improvement in its enterprise risk management framework.”
We take pride in providing proactive claims management, coupled with open communication, leading to the efficient handling of claims. We endeavour to act fairly and honourably in our relations with clients and brokers.
IGI launches Inherent Defect Insurance
International General Insurance (IGI) has launched Inherent Defects Insurance (IDI), a policy designed to reduce the risk for buildings owners. Matthew Gosling, Senior Underwriter, Construction and Engineering at IGI, explains how it is more important than ever for owners, developers, and contractors to protect themselves in the risky business of construction.
What is Inherent Defects Insurance and why is it important?
IDI is a specialist insurance policy that covers the physical damage to the property caused by faulty design, defective materials or bad workmanship, which was not discovered at the time of the project’s completion. It provides a way to minimise or avoid construction defects litigation.
The construction and engineering sector is constantly being reminded of the risks and potential high costs from building issues – school closures, building collapses, unstable structures and hefty restoration and repair bills. The cost of fixing these defects is high and often is not covered under traditional property insurance policies. An IDI policy will provide protection against structural defects during the construction of the building, and the cost of repairing, rebuilding or strengthening of the insured building.
Why should a property developer or contractor take out Inherent Defects Insurance?
In a nutshell, IDI, also alternatively known as Latent Defects, reduces the risk for building owners. It’s generally taken out before construction starts by either a property developer or a contractor.
A key benefit of an IDI policy is that it becomes a transferable asset – it can be assigned to a new property owner if necessary. This means that if a project changes ownership during construction or after a building is sold, the policy will be transferred to the new owner.
The policy tends to last 10 or 12 years after the practical completion of construction and, if triggered, will provide financial support for repairs without seeking to establish liability for the defect. That means it is not necessary to establish who is at fault or to prove negligence, therefore avoiding costly and prolonged litigation. It also cannot be cancelled once the insurer has taken on the risk.
Also, depending on when the issue is discovered, the responsible party may not even be in business any longer, meaning it may be impossible for you to recover the costs from another party. A recent example of this is the fall of Carillon, which was a real shock to the industry.
Carillon was the UK’s second largest construction contractor and went into liquidation in January 2018 because of financial difficulties. The liquidation immediately cast doubt on the big construction projects commissioned by Carillon and should be viewed as a lesson in the importance of safeguarding against the future of construction projects.
The long-tail nature of IDI coverage and non-cancellable nature of the insurance period means that there are not many insurers in the market that provide coverage for an IDI risk.
How can brokers help?
Brokers will be familiar with an “all risks” insurance policy, which usually covers any loss or damage during the construction phase of a building. However, this policy provides no protection for damage that occurs because of an inherent or latent defect in the building. Unforeseen problems with the poor design, workmanship or materials during the construction phase of a building can cause a ripple effect of dangerous proportions.
An IDI policy can work hand-in-hand with all other types of coverage required for a construction project and property insurances, and therefore should be seen as essential for property developers, financer, and owners.
If you would like to speak to Matthew Gosling about this latest development at IGI, CLICK HERE, leave a message and youTalk-insurance will pass your enquiry on.
About Matthew Gosling:
Matthew Gosling joined IGI UK in 2015 with more than 10 years' Construction and Engineering Underwriting experience handling the Insurance and Reinsurance of CAR (Contractors All Risks) and EAR (Erection All Risks) projects, Inherent Defects Insurance (IDI) and annual policies including the supporting Delay in Start Up, Liability and Existing Structures. He has held underwriting positions with HSB Engineering, Sompo Japan and Allianz Global Corporate & Specialty. In May 2018, Matthew was elected Chairman of the Contractors All Risks Group and is a member of the Executive Committee for the London Engineering Group.
If you like the content you see on youTalk-insurance why not take 20 seconds to subscribe to our free newsletter
- 24 May 2018
- 21 May 2018
- 16 May 2018
- 26 Apr 2018
- 19 Mar 2018
- 15 Mar 2018
- 13 Mar 2018
- 7 Mar 2018