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Structural Warranty vs Engineer Professional Indemnity?

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  • 17-04-2022 5:47pm
    #1
    Hockney
    Registered Users Posts: 176 ✭✭


    I'm trying to weigh up the value of taking out a 10-year structural warranty on a new self-build, done through direct labour. 

    I'll also point out that I never intend to sell this house. 


    I have hired a reputable construction engineer, who will be carrying out site inspections at various milestones throughout the build. 


    I'm wondering what the major benefit is on taking out 10-year structural warranty, versus relying on the construction engineers own professional indemnity insurance. It seems if I take out the warranty, the provider will send out an engineer to also inspect at various intervals as my engineer already is. 


    If major structural defects were to appear a few years after construction was complete, I would obviously be taking this up with the tradesman + engineer as a first port of call. 

    If it did end up going to court, I would assume major structural defects would be covered by the engineers own indemnity insurance. 

    So wondering if there are any other major benefits to taking out a structural warranty, any reasons to definitely go for one?

    Thanks in advance.



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    #2
    mike_2009
    Registered Users Posts: 528 ✭✭✭mike_2009


    My understanding is that the structural warranty is only really important if you intend to sell within the 10 years. It's a big point for the buyer's solicitor. As for not selling, never say never! My main reason for getting it is to have a second pair of eyes inspecting the site and catching something early I may not have the experience to pick up on. I'd imagine going after Professional Indemnity claim will take years in court. A structural warranty, if they don't wriggle out with the small print, will protect you with rebuilding costs much earlier than that IF the claim is settled. Not sure I'd want to put that to the test but I'll probably get one, in case I'm forced to sell for some reason - health, bankruptcy, zombie attack etc. Chat to the insurance provider about recent claims and payout timings vs PI for examples? Feed back here as I'd be interested in their answers too!



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    #3
    C. Eastwood
    Registered Users Posts: 757 ✭✭✭C. Eastwood


    https://www.boards.ie/discussion/2058242116/structural-warranty-vs-engineer-professional-indemnity

    I agree with mike_2009

    Obtain the 10 year Structural Guarantee.

    PI Insurance will provide insurance for 6 years.

    You never know when you may need to sell.

    And if you do not sell - Reinstatement works for structural defects usually requires piling, and at a cost of approx €1,200 / pile, these works are very expensive.



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    #4
    Mellor
    Registered Users Posts: 39,022 ✭✭✭✭Mellor



    If major structural defects were to appear a few years after construction was complete, I would obviously be taking this up with the tradesman + engineer as a first port of call. 

    If it did end up going to court, I would assume major structural defects would be covered by the engineers own indemnity insurance. 

    They are similar things, but they are also for distinctly purposes. I think your assumption there is where you are going wrong. Engineers PI insurance covers the engineer only. For example, say the engineer spec'd the wrong mesh in the foundations and they fail. His design is at fault, his PI takes the liability. Unlikely to be the case, just an example. But that's what PI covers.

    On the other hand say the foundations fail because the incorrect mesh was used on site. The engineer has no liability there. His PI covers his design, the construction deviated from the design. In that case the Insurance company will, quite rightly, not entertain a claim against the PI. In a normal situation, the claim would be with the contractor. But this is a self build. You would need to claim against the tradesmen. What insurance requirements did you include in the sub-contracts? Is the cover sufficient? I will they still exist and still have insurance in 5-10 years, etc.

    The engineer is inspecting milestones on site. That is to ensure it is constructed properly, to verify that building regs are adhered to. But he is not there 24/7. He ultimately is giving an opinion on compliance, he is not certifying that all works are perfect and the building will never have issues. If certainly doesn't automatically extend his PI to the workmanship. Although, real world examples are rarely as black and white as the above.

    The structural guarantee serves as a peer review of the structural design. And also important, they are extending their insurance to the worksmanship. That is what you are paying for really. If there was a main contractor doing the build, they would have insurance. But you are the contractor here. A structural guarantee is the option you have to insure you build. It's entirely up to you. You take this out to cover rebuild and rectification costs. Not havign it could affect you home insurance too. It's not required to sell the house. People can ask for it, but you don't need it.



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