Defects in buildings often stay hidden for years. A claimant may not know that a design was negligent until damage appears long after completion. The general limitation period for a claim in the tort of negligence is six years from the date the cause of action accrues, under section 2 of the Limitation Act 1980. In latent damage cases that date can pass before anyone realises there is a problem.
The Latent Damage Act 1986 inserted sections 14A and 14B into the Limitation Act 1980 to address this. Section 14A gives an alternative period of three years running from the date on which the claimant had the knowledge required to bring the claim, where that is later than the primary six-year period. Knowledge means knowing the material facts about the damage and that it was attributable to the alleged negligence.
Section 14B imposes a long-stop of 15 years from the negligent act or omission. After 15 years, a negligence claim is barred even if the claimant did not and could not have known about the damage. The long-stop gives professionals an outer boundary for tortious claims, though it does not apply to contract claims or to the separate statutory duty under the Defective Premises Act 1972, which now carries its own extended periods.
Because a negligence claim can arrive up to 15 years after the work, and a Defective Premises Act claim considerably longer, a firm that has stopped trading still needs cover in place when the claim is made. Professional indemnity is written on a claims-made basis, so it is the policy in force at notification that responds, not the policy in force when the work was done. That is why run-off cover and continuous cover are central to managing latent-damage exposure.
Section 14A turns on knowledge, and the courts have given the term a practical meaning. A claimant has the relevant knowledge once they know enough to realise there is a real possibility the damage was caused by the defendant's act, and could reasonably have been expected to investigate. They do not need to know the precise legal analysis. Constructive knowledge, what the claimant could have discovered with reasonable diligence, counts as well as actual knowledge. For a professional, this cuts both ways: it can shorten the extension where the claimant knew of the problem early, but it can also keep a claim alive for years where the defect was genuinely hidden.
Apex takes the long tail of construction claims into account when discussing limits and run-off for architects, engineers and surveyors. The sector context is set out in the guides for architects, engineers and surveyors.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.