News

The benefits of Mechanical & Electrical (M & E) cover

February 15 2021 By Mitch Cookney



Modern buildings are becoming increasingly complex with up to 30% of construction costs relating to the mechanical and electrical services that support them.

These mechanical and electrical services can be plagued by defects caused by poor design, materials or workmanship and can be highly problematic for the owners and occupiers of affected buildings.

Traditionally, collateral warranties would put the responsibility on the contractors to repair and replace any such defects. However, with insolvency of contractors in the market seeming to be ever increasing, more and more developers are seeing M & E cover as either an extension to the cover or as a standalone policy.  

M & E applies to the mechanical and electrical services installed in the building, including:

  • Boilers, space heating, ventilation, and air conditioning systems
  • Lifts and escalators
  • Building maintenance units
  • Electrical distribution systems
  • Equipment used for building security and environmental control
  • Electrical and mechanical parts of water pumping, pressurisation, and distribution systems

Advantages of having such cover includes:

  • The removal of reliance on collateral warranties
  • The removal of reliance on professional indemnity insurances
  • Cover that is fully transferable to future owners of the building
  • Cover that complements structural building defects insurance
  • The availability of funds for repairs following the discovery of a defect
  • No aggregate claims limit over the lifetime of the policy
  • A building that is easier to sell or rent due to enhanced purchaser/tenant confidence

Cover is available for new property developments, but we can provide some cover retrospectively for those buildings completed in the past two years.

Contact us today for further information.