A defect that is concealed or inactive. Damage from a latent defect is
typically excluded from coverage under all risks property insurance policies.
For example, a home owner discovers that his roof is decaying because the
shingles were treated improperly with fire-retardant chemicals. The cost to
replace those shingles is precluded due to the "latent defect"
exclusion. However, if a fire were to ensue, the exclusion would not prevent
coverage for the damage from the fire.