Inherent Defects Insurance (IDI) in Saudi Arabia
SOCOTEC Middle East, as a leading independent inspection and control body, provides technical expertise for Inherent Defects Insurance (IDI) in Saudi Arabia. IDI, also known as latent defects insurance, protects property developers and investors against hidden construction defects that may appear after project completion.
What is Inherent Defects Insurance (IDI)?
Inherent Defects Insurance covers structural and design defects that are not immediately visible at handover but could result in significant repair costs in the future. IDI provides long-term protection, often up to 10–12 years post-construction.
At SOCOTEC, we perform rigorous technical assessments and inspections during the construction process to ensure compliance with quality standards and reduce the risk of latent defects. Once our assessment is complete, the insurance provider engages directly with the client to deliver the coverage.
In Saudi Arabia (KSA), Inherent Defects Insurance forms a key component of construction insurance requirements, ensuring long-term stability and regulatory compliance.
Inherent Defects Insurance Regulations in Saudi Arabia (KSA)
What is the Inherent Defects Insurance Policy for Construction in KSA?
KSA has strengthened construction insurance regulations in recent years, making IDI a mandatory requirement across most private sector developments.
Since 2020, a legislative requirement has been in place in the Kingdom of Saudi Arabia (KSA): all qualifying private sector construction projects must obtain an Inherent Defects Insurance (IDI) Policy.
The IDI Policy is a compulsory insurance policy implemented by the Saudi Central Bank (SAMA, formerly the Saudi Arabian Monetary Authority) to protect property owners against major structural defects.
Mandatory Scope of Inherent Defects Insurance
The legislation compels private, residential, and commercial ventures to acquire IDI. The requirement applies to a diverse range of structures, including:
- High-rise buildings (towers)
- Hospitals and Hotels
- Warehouses and Industrial structures
- Malls and Educational buildings
- Residential properties
- Venues for gatherings (mosques, restaurants, sports facilities)
- Other high-risk or large installations
Duration of IDI Coverage in Saudi Arabia
Coverage is mandatory for ten years, starting upon the issuance of the Occupancy Certificate and the insurer's receipt of a Certificate of Approval.
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Trusted Third-Party Support for IDI Compliance
Why Choose SOCOTEC to Help you Meet IDI requirements?
Choosing SOCOTEC guarantees full IDI compliance while strengthening the technical quality of your project.
Our role is to provide the critical third-party assurance needed for the insurer (and re-insurers) to accept this long-term coverage.
- Design & Plan Review: Our teams supervise the design phase by meticulously scrutinizing all aspects of the plans. We provide expert feedback on drawings and calculations to ensure they meet the highest technical standards and comply with IDI requirements.
- Construction Supervision: During the construction process, our experts conduct rigorous on-site inspections to verify the proper implementation of all technical requisites. We closely monitor progress until all modifications align with the specified requirements.
- Risk Documentation (RD Reports): As part of the qualification, we undertake the necessary inspection steps and issue official RD Reports (Risk Documentation reports). These reports are dedicated to insurers and re-insurers, helping them accurately assess the covered risk and underwrite the policy.
By choosing SOCOTEC, project stakeholders ensure the correct addressing of potential defects, optimizing their projects for quality, compliance, and securing the necessary IDI policy.
Choosing SOCOTEC guarantees full IDI compliance while strengthening the technical quality of your project.
Our role is to provide the critical third-party assurance needed for the insurer (and re-insurers) to accept this long-term coverage.
- Design & Plan Review: Our teams supervise the design phase by meticulously scrutinizing all aspects of the plans. We provide expert feedback on drawings and calculations to ensure they meet the highest technical standards and comply with IDI requirements.
- Construction Supervision: During the construction process, our experts conduct rigorous on-site inspections to verify the proper implementation of all technical requisites. We closely monitor progress until all modifications align with the specified requirements.
- Risk Documentation (RD Reports): As part of the qualification, we undertake the necessary inspection steps and issue official RD Reports (Risk Documentation reports). These reports are dedicated to insurers and re-insurers, helping them accurately assess the covered risk and underwrite the policy.
By choosing SOCOTEC, project stakeholders ensure the correct addressing of potential defects, optimizing their projects for quality, compliance, and securing the necessary IDI policy.
Who Can Benefit from IDI?
- Property developers in Saudi Arabia
- Construction companies seeking risk assurance
- Real estate investors looking for long-term security
IDI is increasingly adopted across Saudi Arabia’s real estate and construction sectors as a key indicator of long-term reliability.
Why Inherent Defects Insurance is Important in KSA?
In the Saudi market, IDI plays a crucial role in risk management and long-term asset protection.
- Mitigate Financial Risks: Protect developers and investors from the high costs of unexpected repairs.
- Enhance Project Credibility: Projects backed by IDI demonstrate quality assurance and technical compliance.
- Regulatory Alignment: Saudi Arabian authorities increasingly encourage IDI for large-scale developments.
SOCOTEC's role as independent technical inspector for IDI
SOCOTEC acts as the independent technical expert, providing:
- Comprehensive Risk Assessment: Identify potential construction or design defects early.
- Technical Inspections: Verify compliance with construction standards and regulations.
- Reporting for Insurance: Provide detailed reports to support the insurance coverage process.
SOCOTEC does not issue the IDI itself. Our role is to ensure technical integrity, while the insurance provider interacts with the final client for policy issuance and claims management.
As a recognised Technical Inspection Services (TIS) provider, SOCOTEC ensures that construction projects meet all technical criteria required by insurers and reinsurers.
FAQ – Inherent Defects Insurance in Saudi Arabia
These FAQs address the main regulatory and technical requirements associated with IDI in Saudi Arabia.
Looking for expert guidance on IDI compliance in Saudi Arabia?
