Securing Warranty Cover for a Complex Pub-to-Hotel Conversion
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Project Overview
Developer: A Y Developers Ltd
Location: London W6
Development: Conversion of an existing Victorian pub to a 40-bedroom hotel across four storeys, with basement
Development type: Commercial conversion, existing building circa 1901
GDV: £14 million
LBB Consultant: Jack Spear
LBB was approached by an existing developer client, A Y Developers Ltd, project managing and overseeing construction on behalf of an overseas investor, for warranty cover on a distinctive and technically involved scheme in West London. The project involved the conversion of a Victorian pub, originally constructed around 1901, into a 40-bedroom hotel across four storeys, with the excavation and construction of a substantial basement forming a significant part of the works. The scheme carried a gross development value of £14 million, with the required warranty cover set at a £4 million sum insured.
The complexity of the development, combining conversion of an existing structure with major subterranean works, required careful and confident presentation to the insurance market. Compounding this was a pressing commercial deadline: the client needed a structural warranty policy that met the lender’s requirements in order to secure the release of the initial funding drawdown. Without a compliant policy in place, the project could not progress. Timing was therefore as critical as the terms themselves.
LBB’s Approach
Jack Spear presented the scheme to the market in the strongest possible terms, structuring the submission to maximise insurer interest and address the technical complexities head on. Following extensive discussions and negotiations with underwriters, and after obtaining approval from AXA, Jack successfully secured formal terms with Build-Zone, backed by AXA, one of the world’s largest insurers, providing the client and lender with the credibility and financial security they required.
The final premium came in below the initial indication provided to the client, delivering a meaningful cost saving at placement. The policy was accepted by the lender, enabling the funding drawdown to be released and the project to proceed on schedule.
In parallel, Jack identified a further opportunity to support the client’s financial position. Recognising that cash flow during the early stages of the development was a concern, he arranged a premium finance facility that allowed the client to pay only a 20% deposit upfront, with the remaining balance spread across a 12-month term. This provided greater financial flexibility without compromising the insurance cover required.
Outcome
- A 10-year structural warranty secured with Build-Zone (backed by AXA) within a challenging timeframe.
- Lender requirements met in full, enabling release of the initial funding drawdown.
- A lower final premium than the initial indication, a direct cost saving for the client.
- A premium finance facility arranged via PremFina: 20% deposit upfront, balance spread over 12 months.
- No delays attributable to insurance, allowing the project to proceed on schedule.
“We were extremely pleased with the outcome achieved. The policy was arranged within a challenging timeframe, met all lender requirements, and was secured at a lower cost than anticipated. The advice provided was practical, commercially focused, and tailored to our needs, ultimately saving us both time and money while ensuring the project could proceed without delay.”
The case illustrates LBB’s ability to combine technical underwriting knowledge, effective insurer engagement, and commercial awareness to deliver results under time pressure. From securing competitive warranty terms on a structurally complex conversion to arranging a PremFina finance facility that eased immediate cash flow pressures, LBB provided end-to-end support that kept the project on track.
This case study is intended for professional clients and does not constitute personal advice or a financial promotion to retail customers.
The London Belgravia Group Provides Risk and Insurance Advisory Solutions to Global Property Developers. London Belgravia Brokers Ltd, t/a LBB, is an appointed representative of Ten Insurance Services Ltd t/a Eleven Network, which is authorised and regulated by the Financial Conduct Authority
