Latent Defects Insurance in the ACT

10 Years Defect Coverage and all Class 2 ACT developments.

Protect your business and its directors from potential litigation. Under the ACT Property Developers Act 2024, directors of corporate property developers may be held personally responsible for rectification costs in certain circumstances. When considering a personal rectification order, the Registrar must take into account whether the works are covered by Latent Defects Insurance (LDI).

What LDI protects that the statutory warranty doesn’t

For ACT developers, the statutory warranty provides a legal right to pursue the responsible party. LDI protects the developer by transferring the long-term defects risk to the insurer and protecting the balance sheet of the developer for 10 years.

First-resort, no-fault: claim directly with the insurer instead of pursuing the builder
Cover continues even if the builder or developer is no longer trading
Gives off-the-plan buyers and financiers a point of confidence beyond the statutory minimum

Statutory warranty or LDI: what protects your project

Latent Defects Insurance

Premium averaging 1.5% of construction cost
10-year cover from the date of your Occupancy Certificate
First-resort, strict-liability: claim directly with the insurer, no fault attribution required
Cover continues regardless of whether the builder or developer remains in business

Statutory warranty (Building Act 2004)

No premium cost, but requires pursuing the builder directly if a dispute arises
6 years for structural elements, 2 years for non-structural elements
Fault-based: you need to establish a breach of warranty or duty of care
Protection is limited if the builder is insolvent or cannot be found

Who should hold this policy?

For financiers

A financier's security is the building itself. LDI keeps that asset protected for a full ten years, giving Canberra lenders a stronger position on the projects they back.
For future purchasers and owners corporations

An owners corporation that inherits LDI at handover gets ten years of direct, first-resort cover from day one, transferable regardless of who originally built or developed the property.

What Latent Defects Insurance Covers

Covered

Structural elements: load-bearing walls, slabs, columns, beams, transfer structures, and foundations
Building envelope: external walls, roof, and waterproofing systems
Fire Safety Structural Elements
MEP - Mechanical, Electrical and Plumbing systems
TIS (Technical Inspection Cost) averaging 0.2 - 0.25% of CV. This saves considerably more in defect rectification costs.

Not Covered

Cosmetic or non-structural defects

*Not all events are covered

We are national LDI specialists

A dedicated team for ACT developers

SHC's teams work directly with ACT developers, offering the same specialist LDI service we bring to every project we insure across the country.
Risk management that sharpens your whole program.

SHC Insurance Brokers builds independent risk management into every LDI project from design through to occupancy. The result is a demonstrably better, independently verified risk profile, and we use that evidenced position to negotiate significantly sharper rates and broader cover across your entire construction program.
One broker, one file for the full ten-year tail

From Development Approval (DA) through to the Occupation Certificate (OC) and beyond, SHC Insurance Brokers carries you through each stage with one continuous service and one specialist team. We understand where insurance intersects the certification pathway, flagging issues before they become Practical Completion (PC) or OC blockers, because we have seen every version of this before.

Frequently asked questions

Is LDI available for apartment developments in the ACT?

Yes. LDI is available nationally for Class 2 apartment buildings, including in the ACT.

What does LDI cover that the ACT’s statutory warranty doesn’t?

The statutory warranty under the Building Act 2004 requires you to pursue the builder directly and establish fault, and it is limited if the builder is insolvent or cannot be found. LDI is a first-resort, no-fault policy: you claim directly with the insurer, and cover continues for 10 years regardless of whether the builder or developer remains in business.

When do I need to arrange LDI for an ACT project?

LDI must be secured before construction begins. The independent Technical Inspection Service (TIS) that forms part of the policy starts at the design stage. Retrospective cover is not available.

What does LDI cost for an ACT project?

LDI premiums generally range from 1.3% to 1.9% of construction cost, averaging around 1.5%, paid once. SHC can also arrange premium funding where cash flow is a consideration.

Can LDI be transferred to the owners corporation at handover?

Yes. LDI is issued to the developer and is transferable, including to the owners corporation on creation. It remains in force regardless of whether the original developer or builder is still operating.

What is the Technical Inspection Service?

TIS is a mandatory, independent third-party oversight service that runs from design stage through to practical completion, confirming the project is being built to its approved design and code.

Who should consider LDI in the ACT?

Developers of Class 2 apartment buildings who want stronger financier confidence and a buyer-facing point of difference in a competitive Canberra market.

Latent Defects Insurance in the ACT

37+ years.

Leading Broker

$8 Billion

What LDI protects that the statutory warranty doesn’t

First-resort, no-fault: claim directly with the insurer instead of pursuing the builder

Cover continues even if the builder or developer is no longer trading

Gives off-the-plan buyers and financiers a point of confidence beyond the statutory minimum