RESIDENTIAL & COMMERCIAL DEVELOPER SERVICES

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1 RESIDENTIAL & COMMERCIAL DEVELOPER SERVICES

2 WHO IS PREMIER GUARANTEE? Premier Guarantee is one of the UK's leading providers of Structural Warranty and Defects Insurance Services and since 1997 have been providing clients with some of the most innovative, competitively priced and above all secure Structural Warranty solutions available on the market. Having arranged cover for housing units across the UK and Europe, as well as for many key commercial schemes, Premier Guarantee has become the warranty provider of choice for some of the country's leading property developers.

3 WHY SHOULD I USE A STRUCTURAL WARRANTY? A structural warranty (sometimes referred to as a Latent Defects policy) protects individuals, who own and/or live in properties, against faults or defects which could occur in the structure of the property. Most warranties offer cover for the first 10 years of a buildings life (although some can be extended to 12 years). Many mortgage providers and development finance companies require a structural warranty to be in place before releasing funds as it provides certainty that their investment is protected should any defects occur. If you are involved in the construction of residential and commercial buildings, there will be a need to protect your investment against any structural defects occurring. Structural warranties are a standard practice amongst the construction industry and have become part of the requirement criteria for many lenders and funders across the country. They have been designed to give you peace of mind once the build is completed and provide a quick and efficient process for rectifying damage. Structural warranties offer various benefits, including: Peace of mind through 100% risk transfer on our New Homes Scheme Regular site inspections to minimise potential defects occurring Additional cover options to protect against issues such as insolvency, loss of rent etc.

4 DO I NEED TO REGISTER? If you are looking to purchase either a New Homes Warranty, Social Housing Warranty or a Private Rental Warranty, you will be required to register with Premier Guarantee as a Developer and / or Builder. Please ask your broker to send you a Registration Form, complete all relevant details and return it so we can complete your registration to begin the process. HOW DO I GET A QUOTE? Simply complete and return the application form to your broker. Quotations usually take no more than five days to process and should we need any additional information with your application, your broker will contact you to discuss exactly what we need. Please fill out the form as thoroughly as possible to reduce any further requests for information.

5 WHAT AFFECTS THE COST OF MY WARRANTY? There are three main elements that will affect the cost of your warranty: Your Developer rating this is calculated using your past experience and claims history, along with any rating scores you have from other warranty providers. Your financial strength this will dictate whether we need to request any additional security from you. The size of your development either the total reconstruction or sale price of your development.

6 CAN I GET AN INDICATION OF HOW MUCH MY WARRANTY WILL COST? Absolutely. Contact your broker who will be happy to provide you with a quote indication. To calculate your indication we will require some basic information: An overview of your development, such as the number of units you are building and the type of construction you are undertaking. If you are requesting a quote indication on our New Homes scheme, we need the estimated total sale price of the property. If you are requesting a quote indication for any of our other schemes, we need the estimated total reconstruction cost of the property. If you are not registered with Premier Guarantee, but are registered with another warranty provider, please have your Developer rating to hand. Please note that a full application form must be completed in order for a quotation to be issued.

7 TYPES OF CONDITIONS There are two main types of conditions: Technical Conditions These relate to the type of development you are building. They could be requests for additional documentation, such as plans, certification or further clarification on aspects of your build. It is important that you provide this information as soon as possible to ensure you do not experience delays in your application. Administration Conditions This can include security in the form of deposits (or escrows) or guarantees.

8 TYPES OF SECURITY Each application we receive is reviewed by our underwriters to ensure that the parties involved in the development are in a financial position to meet their obligations under our policy. If your financial accounts, company credit score or trading history do not provide a level of certainty, additional security may be required in relation to insolvency cover during the build period and/or claims during the Defects Insurance Period. There are three types of security we will typically ask for: COMPANY INDEMNITY AGREEMENT (CIA) A legally binding document in the form of an indemnity which is signed by a party registered with us to develop or build. This document confirms that the Developer or Builder agrees to rectify any defects that occur during the defects insurance period. ASSOCIATE COMPANY INDEMNITY AGREEMENT It is a legally binding document in the form of an Indemnity which is signed by another company (normally in the group of companies of the developer / Builder) to guarantee that company for the defects insurance period. ESCROW DEPOSIT This is an amount of money that will be held as a bond to be used in the event that a Developer / Builder not being able to fulfil their obligations under the policy. Escrow amounts are calculated based on the rating of the applicant Developer and the number of units to be built in the development.

9 There are two scenarios under which escrows will be retained: 1. If an escrow is required to cover insolvency during the build period. 2. If an escrow is required to cover the Developers responsibilities during the Defects Insurance Period. In scenario 1, escrow amounts will be returned to the Developer once the Certificate of Insurance has been issued on the final unit to be completed on the development. In scenario 2, escrow amounts will be refunded 12 months after the completion of the Developer s period of liability, based on the date of the last Certificate of Insurance issued on the development. In both cases, any interest accrued, calculated at the Bank of England s base rate of interest, will be included in the amount returned to the Developer.

10 OUR WARRANTIES Our Structural Warranties provide our customers with a range of benefits including: Competitive premiums and interest free payment terms Free technical support Cover often available once construction has started Market leading policy coverage backed by A rated insurers Optional extensions of cover provided to add extra level of cover NEW HOME WARRANTY Our New Home Warranty has been designed for house builders building or converting private residential developments to sell. Cover is available for mixed-use developments and includes cover for developer insolvency (subject to status) and alternative accommodation. SOCIAL HOUSING WARRANTY Our Social Housing Warranty provides Housing Associations with up to 12 years cover on new build developments and conversions. Additional cover is available for loss of rent and our right-to-acquire cover extension means cover on the housing units can be extended to 15 years warranty cover at no additional cost. COMPLETED HOUSING Our Completed Housing scheme can provide cover for properties which have been built without the benefit of a warranty in place (subject to scheme criteria). Premier Guarantee for Completed Housing provides cover up to the balance of 10 years so for example, if your property is three years old, you would receive seven years of cover.

11 STOCK REGENERATION Our Stock Regeneration Warranty provides social housing providers with up to 12 years cover on regeneration projects. Premier Guarantee for Stock Regeneration provides social housing providers with cover for a wide range of building works, including replacement of windows and doors, new roofing works, acoustic conditions improvements, improvements to thermal performance, provision of renewable energy services and changes to building services, including ventilation. SIMPLE COMPLETION Premier Guarantee Simple Completion has been set up for any company or individual who is selling completed or partially completed homes which they have acquired through developer insolvency. Simple Completion provides new site owners with the cover they require to meet the criteria of mortgage lenders, allowing them to sell their properties on the private market. SELF BUILD Our Self Build Warranty has been designed for individuals building their own homes. Contractors who are working on Self Build developments can also apply for this cover on behalf of their clients. Unlike a Professional Consultant s Certificate (also known as an Architect s Certificate), Structural Warranties are insurance policies, providing you with cover in the event of damage caused by a defect in your property. To be eligible for this scheme, you must be planning to live in the property for a minimum of one year following completion. If you are going to live in the property for less than this, please apply for our New Home Warranty.

12 HIGH VALUE SCHEME As the size of development projects continue to increase, so does the requirement for higher limit structural insurance which can be difficult to obtain and subject to continuous structure limits. Premier Guarantee does not restrict to a 25million limit and can look at development of all sizes. Premier Guarantee s specialist High Value scheme provides market leading residential, commercial and social housing cover for large single blocks or large scale projects). Benefits include: Full risk transfer following defects period Market leading structural limits Free technical assistance Contaminated land cover Free Dispute Resolution Service Cover for conversion or mixed use developments Insolvency of the Developer during the building period subject to approval for New Homes Access to a dedicated accounts team and inspection programme Technical audits ensuring high quality and consistent building standards

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14 PRIVATE RENTAL / BUILD-TO-RENT The long term investment of Private Rental Sector (PRS) developments makes it one of the most important investments for you to protect. Our PRS scheme provides the Latent Defect / Warranty backing required by funders and institutional investors in purpose-built private rental schemes. Such investments are expected to be built to the correct standards and properly indemnified should structural defects occur. If structural issues arise it could lead to large maintenance /repair costs and loss in net yields. Our PRS policy covers defects caused by failures in design, workmanship and materials for up to 12 years after completion. Even if the builder fails to rectify defects in the first year we will cover this, meaning investments are secured from day one.

15 WHAT IS COVERED? Cover as standard for alternative accommodation, additional costs, professional fees and removal of debris. Optional cover for loss of rent and Builder Insolvency during construction (subject to approval). Reduces reliance on collateral warranties with no need to prove fault or liability in order to claim. Fully assignable to future owners and includes a flexible definition of policyholder enabling open market private sales if required at a later date. Cover includes residential and amenity areas under one excess figure. Liability limited to the Builder for an initial 1 year period.

16 COMMERCIAL SERVICES COMMERCIAL BUILDING WARRANTY Our Commercial Buildings Warranty has been designed for Developers working on commercial projects and mixed-use developments. Our policy includes optional cover for loss of rent and business interruption and provides insurance-backed protection not offered through Collateral Warranties. Some of the benefits of our warranty can be seen here in our comparison tables: Using Collateral Warranties as stand-alone cover for commercial buildings Often obtained as a matter of course from parties responsible for the main construction packages within a project leading to numerous documents being drafted and negotiated Costly legal advice and time to draw up each Collateral Warranty Assignment not always included Contracts (Rights of Third Parties) Act 1999 (as in force 2000) Can be ambiguous and confusing Beneficiary still has to go through courts If a party in the collateral warranty goes into insolvency, there will be no recovery under the collateral warranty On-going adequate Professional Indemnity (PI) levels need to be maintained and reviewed

17 Including a Commercial Buildings Warranty as cover for commercial buildings Standard policy and the document insures the building rather than each contractor separately Standard policy set-up for insured parties to use immediately Fully assignable to future parties Commercial warranty can still operate alongside the act Clearly states what is covered 1st party insurance policy minimises need for policyholder to litigate 1st Party policy and so cover is for 10/12 years regardless Insurance backed policy so maintaining PI not an issue

18 BUILDING CONTROL (Only available in England & Wales) Our residential and commercial Building Control services have been designed to work in synergy with our Structural Warranty services, providing you with a streamlined, efficient service on site. We will support you from early design stages in offering guidance for complying with Building Regulations and minimising risks from inception. Our Building Control customers all receive: National coverage from our network of Surveyors Consistent approach to Building Regulations Competitive rates Free technical advice and support CONTACT US

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20 MD Insurance Services Ltd is the Scheme Administrator for the Premier Guarantee range of structural warranties. MD Insurance Services Ltd is authorised and regulated by the Financial Conduct Authority. Mk Premier Guarantee 2016