Subsidence and Landslip Clause
The subsidence and landslip clause extends property cover to damage caused by gradual sinking, heaving or slipping of the ground on which the insured building stands, typically excluding damage caused by mining, vibration or defective foundations.
- Clause type
- Exclusion
- Origin/Market
- London Market (LMA/NMA/Lloyd’s)
- Favours
- Insurer
- Negotiability
- Negotiable
Purpose
Standard buildings insurance is primarily geared towards sudden events such as fire, storm or escape of water, and often excludes gradual ground movement. Particularly in the UK market, where subsidence damage caused by clay-rich, moisture-sensitive soils is a significant and recurring source of claims, the subsidence and landslip clause specifically extends cover to subsidence, heave and landslip affecting the ground on which the insured building stands.
Effect and limits
Cover typically applies only to damage attributable to natural ground movement, and commonly excludes causes such as mining, defective workmanship, faulty foundations, vibration from construction works, or normal settlement of a new building in its early years. In the UK, the ABI Domestic Subsidence Claims Agreement additionally determines, in the event of a change of insurer, which insurer is responsible for handling a subsidence claim. Because establishing causation is often difficult – subsidence damage develops slowly and several causes may interact – disputes over the conditions for cover are relatively common, as reflected in cases before the Financial Ombudsman Service.
Negotiation and practice
When negotiating the clause, particular attention should be paid to the agreed excess, which is typically set significantly higher for subsidence claims than for other perils. Policyholders with an evidently increased subsidence risk (for example, on clay soils or near large trees) should also clarify whether, and on what terms, cover remains available following a previous claim.
Jurisdictional comparison
In the German-speaking market, the risk of ground subsidence is typically not covered separately but is included within elemental damage cover (see clause-elementarschadenklausel), where “Erdsenkung” (ground subsidence) and “Erdrutsch” (landslip) are usually listed as named perils alongside flood and earthquake; a standalone line of cover comparable to the UK subsidence market, with its own dedicated claims-handling agreement, does not exist in Germany or Switzerland.