Fire Safety and Professional Indemnity
Professional Indemnity and Fire Safety since 2017
The tragic events at Grenfell Tower in 2017, have not only left a lasting impact on the community and the country but have also spurred significant legislative changes within the built environment sector. The introduction of the Building Safety Act 2022 marks a pivotal moment, mandating stricter regulations specifically related to fire safety measures. This shift has reverberated throughout the insurance industry, shaping the landscape for professional indemnity insurance (PI) and prompting brokers and clients to adapt to a rapidly evolving environment.
In the aftermath of the Grenfell Tower fire, the insurance landscape for the built environment and construction sector has became progressively challenging. Insurers have become more stringent, leading to significant premium spikes and the introduction of harsh exclusions that can greatly affect the extent of available coverage. Following a turbulent period, there are indications that the Professional Indemnity Insurance market is evolving for the construction industry. As legislative changes and shifts in insurer preferences take effect, brokers have new chances to assist their clients in securing appropriate coverage.
The change in Professional Indemnity Insurance
At the heart of the government-backed Building Safety Programme lies the Building Safety Fund, a vital component dedicated to guaranteeing the safety and well-being of residents in high-rise buildings. With a primary focus on addressing cladding issues, this initiative aims to facilitate essential remediation works to secure the safety of occupants in their homes.
One significant outcome of this initiative is the introduction of a new insurance clause designed to offer critical professional indemnity insurance coverage to companies and individuals engaged in these crucial undertakings. Historically, professional indemnity insurers have been apprehensive about providing such coverage. However, the inception of this new clause signifies a pivotal shift in the insurance landscape, aimed at fostering greater support and coverage for those involved in these imperative safety measures.
How Cavendish Munro can help
Working with limited or excluded coverage under Professional Indemnity insurance (PI) has become commonplace for many practices in the UK, especially concerning fire safety and cladding-related concerns. In fact, a recent survey conducted by the Construction Leadership Council in 2021 revealed that 78% of practices reported having such restrictions on their policies. If you are operating in an industry affected by these issues, it is important to stay informed and seek out comprehensive coverage options to adequately protect your business.
Cavendish Munro now has the majority of our insurers looking to introduce a level of Fire Safety Insurance Cover to Professional Indemnity Insurance policy wordings for different industries including architects, engineers & construction firms. The cover is now available retrospectively, typically as far back as 2019. Furthermore, specific insurers can consider factoring fire safety cover on an ‘any one claim’ basis. With regular in-person broking appointments and collaborative efforts with insurers, brokers can play a pivotal role in ensuring clients are equipped with the most comprehensive and tailored insurance options available. In light of these developments if you would be interested in a review of your current insurance arrangements the team at Cavendish Munro would be pleased to help. We look to deliver our clients the right combination of premiums and cover from our insurance providers.