The short answer
Fiction. 10-year insurance for new apartment buildings exists. In NSW, legislation recognises compliant decennial insurance, often shortened to DLI, as an alternative to the strata building bond. Building Commission NSW has approved the Resilience LDI policy as compliant DLI.
What the cover does
Resilience LDI gives the owners corporation 10 years of direct cover from occupation for insured Loss arising from specified latent defects in common property.
The owners corporation claims directly under the policy. It does not need to prove fault or pursue the builder or developer first, provided the policy trigger and terms are met. Claims do not depend on the builder staying in business, and the cover stays with the building through changes of ownership.
The sum insured is set using quantity surveyor verified construction cost and increases automatically each year under the policy.
What it does not cover
LDI is not a maintenance plan. It does not cover wear and tear, maintenance or cosmetic defects. Policy terms, exclusions and notification requirements apply, and owners and their advisers can review the policy information provided for a building.
Not a new idea
Latent defects insurance originated in Europe more than 50 years ago and is available in 45 countries. Independent technical inspection services have operated internationally for more than a century.
Resilience brought its LDI model to Australia in 2022 and has operated it since, with technical review built in during design and construction.
DI or DLI?
Both terms appear in the market. The NSW legislation refers to decennial insurance (DLI). Latent defects insurance (LDI) is the name Resilience uses for its policy. In NSW they describe the same 10-year cover.
Why timing matters
Technical review is part of how LDI works. An independent Technical Inspection Service reviews design and construction throughout the project to identify and resolve issues before completion. For that reason, LDI and the Technical Inspection Service must be agreed and engaged on a project before any construction work occurs, including any excavation. LDI is planned for at the start of a project, ideally at feasibility or DA stage.
What to do next
Brokers, lenders and developers who would like to understand how Resilience LDI works on a project can speak with the Resilience team:
Buyers considering a new apartment can ask a simple question: “Does this building have LDI?”