IBG Coverage, Major Providers, and Lender Requirements
Insurance backed guarantee structure: (i) developer/builder's liability period (years 1�2) � builder primarily liable; IBG insurer = backstop if builder fails or becomes insolvent; (ii) insurer's liability period (years 3�10) � IBG insurer directly liable for structural defect remediation within policy limits. Coverage: structural defects in foundations, floor, external walls, roof, frame; waterproofing/tanking failures; drainage defects causing structural damage. Excludes: fair wear and tear; cosmetic defects (minor cracks, plasterwork); consequential losses (loss of rent) unless endorsed; owner's own modifications or alterations. Major providers: NHBC Buildmark � most widely recognised; NHBC-registered builders only; NOT available for conversions; accepted by virtually all UK mortgage lenders; automatically passes to successive owners (registered against the property, not personal to the developer); Premier Guarantee (MD Insurance Services) � available for new builds, conversions, refurbishments, self-build; accepted by most major lenders; Build-Zone � conversions, new builds, commercial-to-residential; ProWarranty � new builds, conversions, basement conversions, extensions; Checkmate (Warranty Group) � structural warranties and latent defects insurance. Lender requirements: UK Finance / CML Handbook sets out approved warranty schemes for residential mortgage purposes; most lenders require 8+ years remaining at the date of the mortgage offer; a property without an approved IBG may be unmortgageable. Scotland: NHBC Buildmark and Premier Guarantee accepted by Scottish lenders; Scottish Building Standards (Building (Scotland) Act 2003) compliance is a separate regulatory requirement.
Assignment on Sale and Making an IBG Claim
Assignment on sale: NHBC Buildmark � automatically passes to successive owners for the remainder of the 10-year term without any formal assignment; the buyer receives the full remaining warranty benefit at completion; Premier Guarantee and most modern IBGs � drafted to benefit 'the owner for the time being'; automatically pass to the buyer on completion; verify by reading the policy transfer provisions; older personal policies � some older IBGs were personal to the original developer and require formal assignment with insurer consent; the seller's solicitor handles the assignment as part of conveyancing; on purchase, register the warranty in the buyer's name with the provider to ensure direct claim access. Due diligence checklist for buyers: obtain copy of IBG policy document, warranty certificate, and policy number; check unexpired term (how many years remain); verify whether policy automatically passes to buyer; check for any previous claims (material to coverage and limits); confirm with lender that remaining warranty term meets their requirements. Claims process: document the defect promptly with date-stamped photographs; obtain a structural engineer's or chartered surveyor's report identifying the defect as a latent construction defect (not wear and tear or the owner's modifications); notify the warranty provider promptly in writing (with evidence); in years 1�2, notify the developer/builder first (keep written records of all builder communications); in years 3�10, notify the IBG insurer directly � they appoint a loss adjuster; the insurer is liable for remediation costs within policy limits; professional evidence is essential for a successful claim.