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What is Machinery Inherent Defects Insurance?
Available for five years from the completion of new-build homes, private rental properties, social housing and commercial buildings, or 10/12 years under our Private Rental Select policy, our Machinery Inherent Defects Insurance (MIDI) cover gives occupants, owners, investors and housing associations peace of mind that electrical and mechanical systems are protected.
Under MIDI cover, damage caused by inherent defects will be repaired, or the cost of repairing, replacing or rectifying affected equipment will be met, subject to the terms of your policy.
New mechanical and electrical fixed service equipment which forms a permanent part of the development for the proper functioning of the property is covered.
This includes:
- Space heating, ventilating, air conditioning, and water heating systems including boilers and calorifiers
- Lifts, escalators and mobility apparatus
- Lighting and electrical distribution systems
- Building security and environmental control systems
- Electrical and mechanical parts of water pumping, distribution and waste systems
- Internet-enabled or “smart” systems included in the list above would be covered
It doesn’t include:
- Freestanding household appliances, such as a washing machine
- Computer programs, electronic data and codes, software and data storage materials
- Property perils (for example fire or water damage)
- Intentional overloading, testing, experiment or deliberate misuse of equipment
- Wear and tear or any known fault at the start of the period of insurance
How does it work?
The MIDI cover comes as part of the relevant LABC Warranty policy, included as standard in our New Homes, Private Rental, Private Rental Select, Social Housing, Self-Build and Commercial products.
Learn more about our policies here.
During the build and as part of our risk management approach to surveying, projects benefiting from MIDI cover are subject to a technical audit. Designs and specifications are audited and inspections take place throughout the installation period to ensure that quality is maintained.
The cover starts from the date of your LABC Warranty Certificate of Insurance and lasts for five years (10/12 years for Private Rental Select).
What are the benefits of a warranty policy that includes MIDI cover?
LABC Warranty MIDI cover gives you the convenience of structural, mechanical and electrical inherent defect cover in one policy:
- No need to rely on collateral and professional indemnity insurances
- Fully transferable cover to future owners, subject to the cover duration
- Makes funds available for repairs following the discovery of a relevant defect
- Developments easier to sell or rent thanks to the added peace of mind for occupiers
Interested to learn more? Download our information sheet or request a call back from one of our sales team on 0800 183 1755.
Examples of MIDI cover in action
Here are a few illustrative where MIDI would provide cover for inherent defects of mechanical and electrical systems:
| Incident | Details | Example Claim Cost |
|---|---|---|
| Lift breakdown | Two (five-year-old) passenger lifts broke down due to an electrical failure of the circuit board and EPPROM chip. HSB technical experts identified the issue which helped the insured save time and money on repair. | £18,000 |
| Lift breakdown | A serious electrical fault caused a lift failure. The exact fault could not be identified which resulted in the replacement of the control panel and wiring. | £30,000 |
| Boiler breakdown | Smoke emitting from a boiler room, was identified as failure of components within a sectional boiler. Two defects were identified (electrical failure of the PCB and failure of four tie bars). Both failures required repair. |
£20,500 |
| Boiler breakdown | The restart of a boiler, following a heating system failure, resulted in serious damage to the main flue system. The boiler was damaged beyond repair, so was replaced. | £20,000 |
| Air conditioning breakdown | An air conditioning unit consisting of one large external unit and twenty indoor units suddenly failed. An electrical fault was identified within the solenoid box and PCB controller. Repairs were made to get the air conditioning back operational. | £2,100 |
Footnotes:
(1): HSB “Equipment risk solutions for newly-constructed and refurbished buildings” 2020
(2): Per The Insolvency Service statistics, published 30 October 2019.
