Abbie - September 5, 2024

When it comes to selecting insurance, many individuals struggle to determine if they’re securing the most appropriate coverage for their needs. A significant number of clients mistakenly seek out Latent Defects Insurance (LDI) when what they actually require is an Insurance Backed Guarantee (IBG). This common misunderstanding can lead you to receive insurance quotations that do not meet the needs of your project.

LDI vs. IBG: What’s the Difference?

Latent Defects Insurance (LDI) is specifically designed to cover structural defects that may emerge after the construction process is complete. These defects can remain hidden for years, only to surface later, potentially causing significant damage. LDI offers long-term protection for property owners, ensuring that any issues arising from these latent defects are covered, thus safeguarding the value and integrity of the property.

Insurance Backed Guarantees (IBG), on the other hand, are focused on protecting against the failure of a contractor to fulfil their workmanship guarantees. This type of insurance is particularly vital if a contractor ceases trading, leaving the property owner without recourse for any substandard work. For homeowners and developers, IBG provides a crucial safety net, ensuring that even if the original contractor is no longer available, any necessary remedial work can still be carried out.

The key difference between these two types of insurance lies in their purpose: LDI protects against hidden structural issues that become apparent after completion, while IBG ensures that the quality of the workmanship is upheld, even if the contractor can no longer honour their commitments.

Could I require both an LDI Policy and an IBG?

While an LDI policy provides essential coverage for structural defects, there are instances where an Insurance Backed Guarantee (IBG) can offer additional protection. For example, consider a new home with a flat roof. An LDI policy will cover structural defects for a minimum period of 10 years. However, flat roofs can be susceptible to water ingress, which may not be covered by your LDI policy. In such cases, an IBG can provide supplementary coverage for specific risks like water ingress, offering comprehensive protection for your project.

Why Choose Compariqo?

Understanding which type of insurance you need is essential to avoiding unnecessary costs and ensuring adequate protection. At Compariqo, we take the guesswork out of this process. With over 25 years of experience in the UK construction industry, our team is well-versed in the nuances of both LDI and IBG. We work closely with our clients to assess their unique situations and guide them towards the most suitable and cost-effective insurance solution.

We pride ourselves on offering same-day quotes, transparent advice, and flexible insurance options that cater to projects of all sizes and budgets. Our goal is to provide our clients with the confidence that they have the right coverage in place, allowing them to focus on their projects without the worry of unforeseen complications.

Get a Tailored Quote Today

Choosing the right insurance is a critical step in protecting your investment. At Compariqo, we’re here to ensure that you have the coverage that perfectly aligns with your project’s specific needs. Whether you require LDI, IBG, or a combination of both, our expert team is ready to assist you.

Contact us today for a personalised quote that’s tailored to your requirements. Let us guide you towards the ideal insurance solution, giving you the confidence and security you need to see your project through to success.