10 Year Structural Defects Insurance Policy for Residential Property

Transcription

1 RESIDENTIAL PROPERTY 10 Year Structural Defects Insurance Policy for Residential Property YOUR POLICY This policy is conditional on the full premium being paid; it is a contract of insurance between you (or any new purchaser of the Residential Property) (the Policyholder) as named in the initial Insurance Term Certificate and Elite Insurance Company Limited (The Insurer). Elite Insurance Company Ltd are authorised by the Financial Services Authority in Gibraltar to provide insurance policies in the UK under authorisation number AHCI Ltd are an Appointed Representative of Brents of Brentwood Ltd who are authorised and regulated by the Financial Conduct Authority. The Policyholder is requested to read the whole of this policy wording, the Insurance Term Certificate and any endorsements included, in order to understand the scope of cover being provided under the terms of this insurance policy. If any of the information contained in the policy is unclear, please contact Scheme Administrator AHCI Limited at Bridge Street, Manchester, M3 2RH. Telephone ; Unless otherwise stated on the Insurance Certificate and elsewhere in this policy, the policy provides the Policyholder with the following benefits: The policy should be accompanied by way of a summary and subject to the conditions and any endorsements printed on the certificates. The policy protects (where this cover has been selected and is shown in the schedule) you if during construction your developer goes into liquidation or is made bankrupt against the loss of contract exchange deposit. If in the first 2 years from practical completion the developer goes into liquidation or is made bankrupt this policy also covers the failure to carry out any repairs identified to the developer in respect of major structural defects. If the developer is not in liquidation and has not been made bankrupt but nonetheless unreasonably refuses to meet its obligations within a reasonable period we will help you to resolve any dispute between you and the developer by giving advice about the range of cover available under the policy and the developer s responsibility to rectify damage caused by major structural defects. If we advise that repairs are covered by the policy and the developer has unreasonably refused to carry out the work within a reasonable period of time, we will pay for the work to be completed. After the initial two years up to the 10th anniversary of the practical completion or the insurance commencement date, whichever is the latter, we will cover the repair of major damage specifically caused by a structural or latent defect which occurred during the course of construction. Once the insurance term certificate has been issued the following cover shall apply; 1. If where due to Insolvency or Fraud the Developer does not commence work on, or fails to complete the Residential Property. (Section A ) 2. The Residential Property is insured from the date of practical completion or the Insurance Commencement Date whichever is the latter and as specified in the Insurance Term Certificate for V2/16/07/2015/SK 1

2 a period expiring 10 years from the date of practical completion against Major Damage, specifically caused by a structural or latent defect during the course of construction. (Sections B & C) 3. In addition to 1 and 2 the policy insures against the cost of removal or containment of Contamination. (Section D) This is a policy of indemnity and does not provide cover for any legal liabilities whatsoever that the Policyholder may have to any third parties arising out of the use or ownership of the Residential Property. LAW APPLICABLE TO THIS POLICY The parties to the contract of insurance shall in the absence of any written agreement to the contrary agreed in writing by the Insurer, be governed by the Law of England and Wales or where the Residential Property is in Scotland, the Law of Scotland. 1. For this policy to be valid there must be a signed Insurance Term Certificate held by the Insured. This should be kept with the policy, together with any amendments agreed and must accompany any claim being made by the insured under the terms of this policy. 2. Reference should be made to any endorsements agreed together with the Insurance Term Certificate in order to establish the exact nature of the cover provided under the policy at that time. YOUR RIGHT TO CANCEL You have the right to cancel this policy; if you wish to do so you must do so within 14 days from the day after receiving your policy documents, you must also return this policy and the Building Term Certificate by recorded delivery to the Scheme Administrators at the address detailed below; AHCI Limited, Bridge Street, Manchester, M3 2RH admin@ahci.co.uk In the event you cancel this policy outside the 14 day period allowed, no refund of premium will be paid. Any return of premium will only be made to the party that has paid the premium. Please note in the case of the insured being a commercial entity, an administration fee of 35 will apply. Before cancelling the cover please check with your mortgage lender because they may require you to have this cover or its equivalent as a condition of any loan. Please remember that if you sell the Residential Property within the period of the insurance, cancellation could affect the ability of any potential purchaser to obtain a mortgage and of any mortgage lender to provide a mortgage on the property. If your Residential Property includes Common Parts for which you are jointly responsible with owners of other Residential Properties, your cancellation will apply to both the cover on your individual Residential Property and the cover for your share of the cost of any claim relating to the Common Parts. So if you cancel your cover, you will likely be obliged under your lease or title to contribute to the cost of repairs along with your neighbours. V2/16/07/2015/SK 2

3 DEFINITIONS Wherever any of the following words appear in bold in the policy wording, they will have the undermentioned meaning. BUILDER Any person, sole trader, partnership or company who undertakes the construction of the new Residential Property or Units. BUILDING PERIOD CERTIFICATE The certificate issued by us when a new residential property has been registered with us prior to completion. By issuing this certificate we are confirming that cover under section A of the policy is in place. Cover under the remaining sections of the policy are not in place until we have issued the Insurance Term Certificate. BUILDING REGULATIONS The building regulations that govern the construction of the Residential Property and which were in force at the time the notice to build was deposited with the local authority. BUYER/YOU/YOUR The person/s having a freehold, leasehold or Scottish title or common hold interest in the new home for the time being for the duration of the policy or any mortgage in possession excluding the developer, builder, directors, partners, and their relatives and associated companies, and all those involved with or having an interest in the construction or sale of the new home. COMMON PARTS Those parts of a multi-ownership building (of which the Residential Property is part), for a common or general use, for which the Policyholder has joint ownership or legal responsibility. DEVELOPER Either; Any person, sole trader, partnership or company with whom the Policyholder has entered into an agreement or contract to purchase the Residential Property on either a freehold or leasehold basis, or; Any person, sole trader, partnership or company that constructs the Residential Property and with whom the Policyholder has entered into an agreement or contract to purchase on either a freehold, leasehold or Scottish title or common hold interest. EXCESS The initial amount relating to each and every claim for which the Insurer has no liability under this policy and which the Policyholder must themselves pay before any settlement is made by the Insurer and which is specified in the Insurance Term Certificate. INSURANCE TERM CERTIFICATE The certificate issued on behalf of the Insurer to signify acceptance of each Residential Property for insurance under Sections B to D here under following the notification of satisfactory practical completion by the appointed building inspector. INSOLVENCY Insolvency shall have the following meaning: An order is made or a resolution is passed for the winding-up, administration or bankruptcy of the Developer (except for the purposes of solvent amalgamation or reconstruction previously approved by the Underwriter in writing): or A liquidator, trustee, administrator, administrative receiver. Manager, trustee in bankruptcy or similar official is appointed over the whole or any part of the assets of the Developer or the Developer or the directors of the Developer request any person to appoint any of the same: or A notice of appointment or a notice of V2/16/07/2015/SK 3

4 intention to appoint an administrator under the relevant terms to the Insolvency Act 1986 is issued by the Developer or its directors. INSURER Insurer means Elite Insurance Company Limited. Elite Insurance Company Ltd is registered in Gibraltar, number and is licensed and regulated by the Gibraltar Financial Services Commission under the Insurance Companies Act 1987 of Gibraltar and is a member of the UK s Financial Services Compensation Scheme, Financial Ombudsman Service and the Association of British Insurers (ABI). Elite Insurance Company Limited are authorised by the Financial Services Commission in Gibraltar and authorised and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request. or components of the Structure which adversely affects the structural stability or resistance to damp and water penetration; or b) A condition requiring immediate remedial action to prevent actual damage to a load-bearing element of the Residential Property which adversely affects the structural stability or resistance to damp and water penetration; or c) A condition requiring immediate remedial action to prevent imminent danger to the health and safety of the occupants caused by a defect in the design, workmanship, material, components of the Structure or failure of the Developer to observe and comply with Building Regulations in respect of flues and chimneys; which is discovered and notified to the Insurer during the term of Structural Insurance Period. NEW DEVELOPMENT A Residential Property or group of Residential Properties located at the Site. SCHEME ADMINISTRATOR Scheme Administrator This policy is administered by AHCI Limited, Bridge Street, Manchester, M3 2RH. LIMITS OF INDEMNITY The liability of the Insurer in respect of Sections A, B, C and D shall not exceed the amounts shown on the Insurance Term Certificate and Schedule or the Limits of Indemnity as detailed within this policy, whichever is the lesser. The Limit of Indemnity is index-linked in accordance with the House Rebuilding Cost index prepared by the Royal Institution of Chartered Surveyors on each anniversary date of the commencement of the period of insurance. MAJOR DAMAGE a) Destruction of or physical damage to a load-bearing element of the Residential Property caused by a defect in the design, workmanship, material ORIGINAL SPECIFICATION The Specification the developer used to construct the new home up until the effective date shown on the insurance certificate. POLICYHOLDER The purchaser or owner of the property which is the subject of this insurance acquiring a freehold, leasehold, or Scottish Title and Commonhold interest in the Residential Property or their successor in title, or any mortgagee or lessor whose interest has been noted under the policy. RESIDENTIAL PROPERTY The property described in the Insurance Term Certificate comprising; a) the Structure b) all non-load bearing elements, fixtures and fittings for which the Policyholder is responsible; c) any Common Parts relating or boundary walls forming part of or V2/16/07/2015/SK 4

5 providing access for the disabled; d) the drainage system within the perimeter of such property for which the Policyholder is responsible; e) any garage or other permanent out-building. Please note this cover does not include any insurance for a swimming pool, a temporary structure, retaining wall which does not provide support to the main structure, freestanding household appliance, fence, boundary wall not forming part of or providing support to the Structure, any path or roadway not providing access for the disabled. SITE The area within the boundary of the New Development. The following elements shall comprise the Structure of the Residential Property: a) foundations; b) load-bearing parts of floors, staircases and associated guard rails, walls and roofs, together with loadbearing retaining walls necessary for stability; c) roof covering; d) any external finishing surface (including rendering) necessary for the water-tightness of the external envelope; e) floor decking and screeds. STRUCTURAL INSURANCE PERIOD The period expiring exactly 10 years from the date of practical completion against Major Damage (as specifically defined under DEFINITIONS) as specifically caused by a structural or latent defect during the course of construction and as detailed in the Insurance Term Certificate for the Residential Property. WATERPROOF ENVELOPE Waterproof Envelope shall mean the ground floors, external walls, roofs, skylights, windows and doors of the Residential Property but excluding those parts below ground floor or slab level, except where especially accepted by AHCI and detailed in writing in this policy as being included. There will be an additional cost for this cover and an inspection required to be carried out prior to any cover or cost for said cover being advised. POLICY BENEFITS THE INSURANCE COVER During the structural insurance period the following cover is provided by this policy SECTION A INSOLVENCY OF THE DEVELOPER PRIOR TO OR DURING THE BUILDING PERIOD If due to Insolvency or Fraud the Developer does not commence work on a Residential Property the Underwriter will refund the deposit paid by the Policyholder. If due to Insolvency or Fraud the Developer fails to complete the Residential Property after work has commenced the Underwriter will at its sole option: 1) pay the additional cost required to complete the Residential Property; Or 2) refund the loss of money paid by the Policyholder to the Developer as a deposit for the construction of the Residential Property; Provided that the Underwriter is only liable under this Section in respect of monies paid by the Policyholder to the Developer subject to a maximum of 10% of the original purchase price for the Residential Property or 100,000 whichever is the lesser. V2/16/07/2015/SK 5

6 SPECIAL CONDITIONS APPLICABLE TO SECTION A a) If the Policyholder withholds, retains or receives back any part of the deposit for the Residential Property the Underwriter will be entitled to deduct such amount from monies they would otherwise be obliged to pay under this Section. b) The Underwriter is only liable under this Section in respect of the original contract price, as declared, and not in respect of any extras agreed subsequent to the contract. c) The Policyholder cannot recover under this Section if they are entitled to make a claim under contract against the Developer in respect of liquidated damages or financial penalties of any kind. d) The Policyholder cannot recover under this Section in respect of any registration fee, administration fee or booking fee paid to the Developer No payment will be made on the following prior to the home being completed: i) claims for anything that is not part of the Residential Property ii) any claim made after the legal completion of the purchase by the first buyer of the Residential Property iii) claims by any person(s) other than the buyer iv) any claim where we have not issued a valid building period certificate v) compensation for the death, injury to the body or mental health, loss of enjoyment, use, inconvenience, income, business opportunity or inconvenience, stress or any other consequential or financial loss of any description. For the purpose of this Section only The Definition of Developer under this section shall only include the Builder if the Developer and Builder are one and the same legal entity for the New Development. For the avoidance of any doubt the definition of Developer does not include any sub-contractor or sub-consultant employed at the New Development; it covers the Developer and the builder if they are one and the same only. SECTION B The first 2 years after the home is built Subject to general conditions of this policy and any endorsements on the certificate, the following cover is available during the first 2 years after the effective date: For 2 years after the effective date, where the buyer has made a request in writing that the developer meets one or more of the costs listed at sections B.1 to B.5 below, where the policy holder has brought this to the attention of the scheme administrator, who has then undertaken a formal review and finds in favour of the policy holder and the developer unreasonably refuses to meet such costs or to carry out repairs, as appropriate, within a reasonable period, or is in liquidation or is made bankrupt, we will pay: B.1. The reasonable cost of rectifying or repairing physical damage caused by the developer s failure to comply with the requirements in the construction of the new home. B.2. The reasonable cost of rectifying excessive sound transmission through party walls or floors arising from within continuous structures. B.3. The reasonable cost of rectifying the presence of imminent danger to the physical health and safety of the occupants of the new home caused by its failure to comply with the building regulations that were in force at the time the building notice was deposited with the local authority, in respect of the following: V2/16/07/2015/SK 6

7 PART A Structure PART B Fire Safety PART C Site Preparation, containments and resistance to moisture PART D Sanitation, hot water safety and water efficiency PART E Drainage and waste disposal PART F Protection from falling, collision and impact B.4. The reasonable cost of alternative accommodation where the new home is not fit for habitation as a result of the carrying out of remedial works by us covered under the terms of this policy provided that you have first obtained our written consent to such costs being incurred and subject to a maximum of or 15% of the rebuilding cost, whichever is the greater. Said figure shall be index linked annually for the period of the policy. B.5. The reasonable cost of professional fees incurred in connection with your claim, provided that you have first obtained our written consent to such costs being incurred. We will not pay under Section B: 1. Any loss due to or arising from any alteration, modification or addition to the new home after the date of issue of the insurance certificate. 2. Any reduction in value of the new home. 3. Any claim or contribution to a claim where cover is available under another insurance policy, or where some other form of compensation or damages is available to you. 4. Any sums in respect of the excess. 5. Any claim where we have not issued a valid insurance certificate. 6. Anything that you knew about, or which you could have reasonably been expected to know about, when you purchased the new home including any items mentioned in a home condition report. 7.Anything for which a sum of money has been withheld from the purchase price. 8.Reinstatement of any areas not directly affected by physical damage or major physical damage. 9. Claims by any person(s) other than the Policy holder. 10. Claims for any loss that is caused by anything other than the failure by the developer to build to the requirements. 11. Any sum that exceeds our maximum liability. 12. Any claim reported for the first time to the developer or to us more than 2 years after the effective date (the effective date as specified in the certificate of insurance). 13. Any sum in connection with the death, injury to the body or mental health, loss of enjoyment, use, income, business opportunity, sales opportunity, or inconvenience, stress or any other consequential or financial loss of any description. 14. Additional costs arising from unreasonable delays in reporting a claim either to us or the developer. 15. Claims for the prevention of, or any loss caused by surface or any other form of condensation. 16. Any costs that have been taken into account by the developer or by us in connection with a claim from a previous buyer. 17. Claims for wear, tear, neglect, lack of maintenance, scratching, chipping, staining, fading, efflorescence, changes in colour, opacity or texture. 18. Sums in connection with or caused to or by the presence of a swimming pool, lift, or lift shaft (In the event the lift or escalator has been altered in any way from the original design when policy was incepted), escalator, or associated plant and equipment. 19. Claims for anything that is not part of the new home. 20. Any repair that exceeds the original specification for the new home. 21. Any loss or damage caused by pollution, contamination or ionising radiation, except claims covered by V2/16/07/2015/SK 7

8 part Anything excluded by endorsement on the insurance certificate. 23. Any loss resulting from flooding or a change in the water table level, including water logging of gardens. 24. Any loss caused by storm force conditions. 25. Any sum above your proportional share of the reasonable cost of repairing physical damage to common parts. SECTION C Year 3-10 after the home is built Subject to the general conditions of this policy and any endorsements on the certificate, the following cover is available: From the start of the third year after the effective date until the tenth anniversary of the effective date we will pay: C.1 The reasonable cost of rectifying or repairing major physical damage which is caused by a failure by the developer to comply with the requirements in the construction of the new home. C.2 The reasonable cost of rectifying a present or imminent danger to the physical health and safety of the occupants of the new home caused by its failure to comply with the Building Regulations that were in force at the time the Building Notice was deposited with the Local Authority, in respect of the following: Part A Structure Part B Fire Safety Part C Site preparation, contaminants and resistance to moisture Part D Sanitation, hot water safety and water efficiency Part E Drainage and waste disposal Part F Protection from falling, collision and impact C.3 The reasonable cost of alternative accommodation where the new home is not fit for habitation as a result of the carrying out of remedial works by us covered under the terms of this policy provided that you have first obtained our written consent to such costs being incurred and subject to a maximum of or 15% of the rebuilding cost, whichever is the greater. C.4 The reasonable cost of professional fees incurred in connection with your claim, provided that you have first obtained our written consent to such costs being incurred. What we will not pay under Section C: 1. Claims for any loss that is caused by anything other than the failure by the developer to build to the requirements 2. Any repair that exceeds the original specification for the Residential Property 3. Reinstatement of any areas not directly affected by major physical damage or physical damage 4. Any sum that exceeds our maximum liability 5. Any loss resulting from flooding or a change in the water table level, including water logging of gardens 6. Any sum in connection with death, injury to the body or mental health, loss of enjoyment, use, income, business opportunity, sales opportunity or inconvenience, stress or any other consequential or financial loss of any description 7. Claims for wear, tear, neglect, lack of maintenance, scratching, chipping, staining, fading, efflorescence, changes in colour, opacity or texture 8. Any sum above your proportional share of the reasonable cost of repairing major physical damage to the common parts V2/16/07/2015/SK 8

9 9. Any claim or contribution to a claim where cover is available under another insurance policy, or where some other form of compensation or damages is available to you 10. Claims by any person(s) other than the policy holder 11. Any loss or damage caused by pollution, contamination or ionising radiation, except claims covered by Section D 12. Additional costs arising from unreasonable delays in reporting a claim either to us or the developer 13. Any reduction in value of the new home 14. Sums in connection with or caused to or by the presence of a swimming pool, lift or lift shaft, escalator, or associated plant and equipment 15. Any loss caused by storm force conditions 16. Claims for anything that is not part of the new home 17. Claims for the prevention of, or any loss caused by surface or any other form of condensation 18. Any sums in respect of the excess 19. Any loss due to or arising from any alteration, modification or addition to the new home after the date shown on the insurance certificate 20. Anything for which a sum of money has been withheld from the purchase price 21. Any costs that have been taken into account by the developer or by us in connection with a claim from a previous buyer 22. Anything that you knew about, or could have reasonable been expected to know about, when you purchased the new home including any items mentioned in a Home Condition Report 23. Any claim that could reasonably have been reported in writing to the developer or to us within two years of the effective date but was not reported to the developer or to us 24. Anything excluded by endorsement on the insurance certificate SECTION D CONTAMINATION The Insurer shall indemnify the Policyholder during years 3 to 10 of the Structural Insurance Period for the cost of removing or containing contaminants in the ground where: a) the contaminants were known to be harmful and known to exist on the Site at the time the notice to build was deposited with the local authority; and against any failure of the builder to carry out repairs during years 1 and 2 that are covered under the policy and b) the removal or containment of the known contaminants was part of the original Site preparation scheme; and c) where a Government Department has issued the Policyholder with a Notification of the Identification of Contaminated Land The Excess for each and every claim is as specified in the Insurance Term Certificate and Schedule. The Insurer will not be liable to the Policyholder under this Section for any claim; 1. in connection with contamination outside the boundary of the Site; or 2. in connection with contamination that migrates on to the Site; or 3. in connection with contamination that migrates from the Site; or 4. for anything that was not considered to be harmful at the time the notice to build was deposited with the local authority but is later considered to be harmful; or 5. in respect of contaminants or contamination at the Site not identified prior to the notice to build being deposited with the local authority; or 6. for anything that arises out of a change of legislation or retrospective change in legislation or definition of contamination or harmful material that occurs after the date of notice to build was deposited with the local authority; or 7. in connection with ionising radiation. V2/16/07/2015/SK 9

10 ADDITIONAL EXTENSIONS In addition, in the event of a valid claim under Sections A to D of this policy, the Insurer may, with their prior written consent, pay within the Limit of Indemnity the following: 1. ADDITIONAL COSTS Such additional costs and expenses as are necessarily and reasonably incurred by the Policyholder solely in order to comply with Building Regulations or Local Authority or such other Statutory Provisions, provided that the Insurer shall not be liable for those costs that would have been payable by the Policyholder in the absence of the discovery of a valid claim under the policy. 3. FEES Such Architects, Surveyors, Consulting Engineers, Legal and other fees which are in the opinion of the insurer, necessarily and reasonably incurred by the Policyholder in relation to the complete or partial rebuilding or rectifying work to the Residential Property but shall not include costs or fees incurred by the Policyholder in investigating and/or preparing a claim without the Insurer s prior written consent to such costs being incurred. 4. REMOVAL OF DEBRIS For each Residential Property the necessary and reasonable cost and expenses incurred by the Policyholder in respect of: 2. ALTERNATIVE ACCOMMODATION COSTS Such additional costs and expenses as are necessarily and reasonably incurred by the Policyholder for a period not to exceed 26 weeks in respect of removal, storage and alternative accommodation whilst the Residential Property is uninhabitable. However the maximum amount payable under this section is or 15% of the rebuilding cost, whichever is the greater. a) removal of debris from and/or; b) dismantling or demolishing of and/ or; c) shoring up of, the Residential Property. V2/16/07/2015/SK 10

11 EXCLUSIONS APPLICABLE TO THE WHOLE POLICY The Insurer shall not be liable to the Policyholder for any; 1. ALTERATIONS Loss or damage due to or arising from any alteration, modification or addition to the Residential Property after the issue of the Insurance Period Certificate. 2. CONSEQUENTIAL LOSS Consequential loss of any description and howsoever arising except as expressly provided for in this policy. 3. CHANGE IN COLOUR Any change in colour, texture, opacity or staining or other ageing process to any element of the Residential Property. 4. DEFECTS IN EXISTING WORKS Loss or damage due to or arising out of any defect in the design, workmanship, materials or components of the Residential Property that was installed or constructed prior to the construction works that are the subject of this insurance. 5. HUMIDITY Loss or damage caused by or consequent upon humidity in the Residential Property that is not the direct result of a defect in the design, workmanship, materials or components of the waterproofing elements of the Waterproof Envelope of the Residential Property. 6. MAINTENANCE AND USE Inadequate maintenance of or abnormal use of the Residential Property or the imposition of any load greater than that for which the Residential Property was designed or the use of the Residential Property for any purpose other than that for which it was designed, unless covered by a Policy endorsement by the Insurer and any additional premium paid in full. 7. PERSONAL INJURY Any costs, losses, expenses or damages for death, bodily injury, disease, illness or damage to mental health 8. PRIOR KNOWLEDGE Anything which would constitute a valid claim under the policy and about which the Policyholder was aware of or should have been aware of prior to purchasing the Residential Property. 9. REASONABLENESS In the event of a valid claim under the terms of the policy, the insurer shall only be responsible for reasonable costs and expenses. Whenever possible if items can be found to match existing items at a reasonable cost the insurer will endeavour to facilitate this. The insurer will have no liability and will accept no responsibility for any additional costs if a similar match it not possible at a reasonable cost. 10. RADIOACTIVE CONTAMINATION, CHEMICAL, BIOLOGICAL, BIO- CHEMICAL AND ELECTROMAGNETIC WEAPONS Loss, damage, liability or expenses directly or indirectly caused by or contributed to by or arising from: a) ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel; b) the radioactive, toxic, explosive or other hazardous or contamination properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof; c) any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter; d) the radioactive, toxic, explosive or other hazardous or contamination properties of any radioactive matter. V2/16/07/2015/SK 11

12 The exclusion in this sub-clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purpose. e) any chemical, biological, biochemical, or electromagnetic weapon. 11. SEEPAGE Loss or damage caused by seepage of water into the Residential Property insured below ground floor slab level. 12. SETTLEMENT Loss or damage caused by or consequent upon normal settlement or bedding down of the Residential Property. 13. SONIC BANGS Loss or damage directly occasioned by pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. 14. SPECIAL PERILS Loss or damage caused by or consequent upon fire, lightning, explosion, typhoon, hurricane, cyclone, volcanic eruption, earthquake, storm, tempest, flood, subterranean fire or other convulsion of nature, aircraft or other aerial devices or articles dropping therefrom, escape of water from tanks, apparatus or pipes, malicious persons, theft, attempted theft, impact or any accidental cause. 15. SUBSIDENCE Loss or damage caused by or consequent upon subsidence, heave or landslip unless such loss or damage is as a result of a defect in design, workmanship, materials or components of the Structure of the Residential Property. 16. TOXIC MOULD Loss, damage or bodily injury arising out of any pathogenic organisms regardless of any other cause or event that contributed concurrently or in any sequence to that liability. Pathogenic organisms means any bacteria, yeasts, mildew, viruses, fungi, mould or their spores, mycotoxins or other metabolic products. 17. VERMIN Loss or damage caused by or consequent upon the actions of rodents, vermin or insect infestation. 18. WAR AND TERRORISM RISKS Any claim whatsoever in respect of loss, damage or liability directly or indirectly occasioned by, happening through or in consequence of war, invasion, any act of terrorism, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation or nationalisation or requisition or destruction of or damage to property by or under the order of any government or public or local authority. 19. WATER TABLE Loss or damage resulting solely from a change in the water table level. This exclusion shall not however apply to any seasonal change in the water level. 20. WEAR AND TEAR Loss or damage caused by or attributable to: a) wear and tear b) normal dampness, condensation or shrinkages c) deterioration whether caused by neglect or otherwise. 21. WILFUL ACTS Any wilful neglect or criminal act of the Policyholder or any other party. V2/16/07/2015/SK 12

13 CONDITIONS 1. CONTRIBUTION If at the time of any occurrence giving rise to a claim or potential claim under this policy; a) there is, or would but for the existence of this insurance, be any other insurance applicable or; b) the Policyholder has entitlement to any statutory damages or compensation, this policy shall be limited to any amount in excess of such insurance, damages or compensation and cannot be called into contribution. 2. FRAUD The insured must not act in a fraudulent way. If the Insured or anyone acting for the Insured or the user: - makes a claim under the insurance knowing the claim to be false or exaggerated in any way; or; - makes a statement in support of a claim knowing the statement to be false in any way; or - sends us or administrator any documentation in support of a claim knowing the documentation to be forged or false in any way; or - makes a claim for any loss caused by the insured s deliberate act or with the insured s agreement; then the insurer: - will not pay the claim - will not pay any other claim which has been or will be made under the insurance. - may declare the insurance void; - may be entitled to recover from the insured the amount of any claim already paid under the insurance - will not return any of the premiums; - may pass your details onto the authorities should it become necessary for investigation purposes. 3. INDEX LINKING Where shown on the Final Schedule, the Limit of Indemnity together with the Excess referred to within this policy will be increased in line with the RICS House Re-building Cost Index prepared by the Royal Institution of Chartered Surveyors on each anniversary date of the commencement of the period of insurance under Sections B, C and D of this policy. For the purpose of settlement of any claim hereunder the Limit of Indemnity, as adjusted in accordance with the foregoing provision shall be regarded as the Limit of Indemnity at the time of discovery by the Policyholder of such claim. 4. INSURER S RIGHTS In the event of any occurrence which may give rise to a claim under this policy and which has been notified to the Insurer, the Insurer and its agents shall, with the permission of the Policyholder, be entitled to enter the Residential Property. This will be in order to investigate, and if provided for under the policy, carry out proper repairs or the complete or partial rebuilding of the Residential Property to the Insurer s satisfaction. For the avoidance of doubt, where reasonable access cannot be gained to the Residential Property within a reasonable period of time, no claim shall be accepted. 5. MISREPRESENTATION This policy will be voidable from the commencement date of this policy in the event of any misrepresentation, misdescription, error, omission or nondisclosure by the Policyholder. 6. RECOVERIES FROM THIRD PARTIES The Insurer is entitled and the Policyholder gives consent to the Insurer to control and settle any claim and to take proceedings at its own expense but in the name of the Policyholder to secure compensation from any third party in respect of V2/16/07/2015/SK 13

14 any loss or damage covered by this policy of insurance. The Policyholder agrees to assist and cooperate in a timely manner with any requests from the Insurer required to progress said proceedings. policy has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this policy but this does not affect any right of remedy of a third party which exists or is available apart from the Act. 7. THIRD PARTY RIGHTS A person who is not a party to this LIMITS OF INDEMNITY The maximum amount the Insurer will pay for any all claims under the various Sections of the policy is as follows; SECTION A MAXIMUM OF TEN PERCENT OF THE ORIGINAL PURCHASE PRICE OF THE Residential Property OR 100,000, WHICHEVER IS THE LESSER SECTION B 10,000,000 for any one Residential Property or the rebuilding cost for the Residential Property, whichever is the lesser. The limit for all Residential Properties in one continuous Structure is 10,000,000 or the rebuilding cost for the Residential Properties, whichever is the lesser. The limits for Section B are index-linked in accordance with General Condition 3 of the policy. SECTION C The limit for all Residential Properties in one continuous Structure is 10,000,000 or the rebuilding cost for the Residential Property, whichever is the lesser. Where the combined value of all Residential Properties within a continuous Structure or on a Site exceeds 10,000,000 the total amount payable in respect of all claims in relation to the Residential Properties, the Site and the continuous Structure shall not exceed 10,000,000. The limits for Section C are index-linked in accordance with General Condition 3 of the policy. SECTION D 1,000,000 for any one Residential Property or the rebuilding cost for the Residential Property, whichever is the lesser. COMMON PARTS The maximum the Insurer will pay for any one claim relating to Common Parts will be the amount that the Policyholder has a legal liability to contribute towards the cost of repairs, rectification or rebuilding works. All claims are subject to the Limits of Indemnity for the individual Sections detailed above and the Excess as detailed in the Insurance Term Certificate and Schedule. V2/16/07/2015/SK 14

15 DISPUTES Where a dispute arises between the buyer of the new Residential Property and the developer, the scheme administrator provide a service that offers advice regarding liability and extent of cover available under this warranty policy only. This may, at our sole discretion, be based on an examination of paper submissions or a physical inspection of the works in dispute or a combination of both. Any recommendations we make are not binding on either party, however where we believe policy cover applies but the developer refuses to do any recommended work we will arrange for it to be done under the terms of this policy. Please see the Contact Information section should you wish to notify us of a dispute. HOW TO MAKE A CLAIM On the discovery of any occurrence of circumstance that may possibly give rise to a potential claim under any section of this policy, the Policyholder shall as soon as reasonably possible: submitting full details of the claim and supplying all correspondence, reports, plans, certificates, specifications, quantities, information and assistance as may be required to verify the claim. 1. Take all responsible immediate steps to prevent any further loss or damage. 2. Give written notice to the Company at: AHCI Limited, Bridge Street, Manchester, M3 2RH Where the Insurer subsequently accepts the claim, the Insurer will reimburse the reasonable expenses incurred in obtaining such reports. COMPLAINTS PROCEDURE 1. In the unlikely event that you may have a complaint under this policy, you the Policyholder should write in the first instance to; AHCI Limited, Bridge Street, Manchester, M3 2RH In order for them to deal with your complaint as quickly as possible, can you please ensure you quote your Building Term Certificate or Insurance Certificate Number and provide as much detail as possible regarding the matter you wish them to investigate. 2. If after receiving their response, you are still not satisfied, you can then approach the Financial Ombudsman Service (FOS). The FOS is an independent body that arbitrates on complaints about general insurance products. It will consider complaints after 1 has have been followed. The Ombudsman can be contacted at: Insurance Division Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR V2/16/07/2015/SK 15

16 ABOUT THE INSURER Elite Insurance Company Ltd is registered in Gibraltar, number 91111, and is licensed and regulated by the Gibraltar Financial Services Commission under the Insurance Companies Act 1987 of Gibraltar and is a member of the UK s Financial Services Compensation Scheme, Financial Ombudsman Service and the Association of British Insurers (ABI). Elite Insurance Company Limited are authorised by the Financial Services Commission in Gibraltar and authorised and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available upon request. FINANCIAL SERVICES COMPENSATION SCHEME If we are unable to meet our liabilities you may be entitled to compensation under the Financial Services Compensation Scheme (FSCS). Further information about compensation scheme arrangements is available at or by at enquiries@fscs.org.uk or by phone on DATA PROTECTION ACT 1998 The insurer may store your information (including your personal details) on a computer and use it for administration, risk assessment, research and statistical purposes, marketing purposes and for crime prevention. Your personal details will only be disclosed to third parties if it is necessary for the performance of this insurance contract. It may be sent in confidence for processing in other companies in our group (or companies acting on our instructions), including those outside the European Economic Area. In addition we may disclose the information you have supplied to other third parties such as solicitors, loss adjusters, repairers, the Police and Government agencies and other insurance companies in order to process your claim, and meet our legal obligations. By accepting this insurance, you signify your consent to the above and for your information (including your personal details) to be processed by us, our agents and the administrator. V2/16/07/2015/SK 16