Safety inspectors halt work after insurers rein in cover


Some UK building safety inspectors have suspended operations after insurers backed away from providing professional indemnity cover to the construction market following the Grenfell Tower fire.

Construction industry figures warned that unless insurance availability improved, a lack of inspectors to certify buildings would significantly affect developers’ ability to complete projects.

New buildings must be approved by an inspector who certifies that they comply with building regulations. These inspectors can only operate with professional indemnity and public liability insurance.

A director of a company offering inspections and related services, who asked to remain anonymous, said his 20-person company had been refused cover.

“If it’s not resolved before too long it’s going to have a major impact on our business survival,” he said.

The director said the problems related to risks following the Grenfell Tower disaster, which killed 72 people two years ago after a catastrophic fire appeared to spread over flammable cladding.

“We’ve sat in meetings with the government and insurance companies and had to provide huge amounts of information relating to high-rise clad buildings,” he said.

He said his company was referring new business to a competitor under a temporary arrangement. Existing clients have been forced to seek approval from local authorities instead, incurring extra fees and long delays.

Aedis, a Darlington-based building control company employing more than 100 people, said this month it could not operate its approved inspector services, which check buildings for regulatory compliance such as fire safety, because of a lack of insurance.

The company said only one insurer was providing cover to approved inspectors, and “several . . . including Aedis have been unable to secure cover upon renewal”.

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“This situation could not have been anticipated and has arisen through no fault of our own, but we are working to find a resolution to this issue as soon as possible,” it said in a statement.

There are 96 inspector companies in the UK, according to the Construction Industry Council.

Gavin Dunn, chief executive of the Chartered Association of Building Engineers, said: “If specialists, such as approved inspectors and fire engineers, are unable to obtain cover this could have the effect of forcing some companies to withdraw from the market altogether . . . this could have a direct impact on industry capacity.”

Insurance brokers said the fire had made underwriters much more wary of providing professional indemnity cover across the construction market.

“Straight after Grenfell, insurers had to take stock of their exposure and still no one knows where the balls might fall,” said Adam Power, a director at insurance broker Willis Towers Watson.

“They initially limited their exposure to buildings over 18 metres and to aluminium cladding. That’s now moved on and there is more limited cover for fire safety generally.”

Andrew Harrison-Sleap, head of the construction professional indemnity business at insurance broker Marsh JLT Specialty, said that the publicity around Grenfell was putting insurers off.

“The PI insurance market is highly emotive,” he said. “Underwriters are in a position where they are under no pressure to write business, and are highly selective over what they do and don’t write.”

The insurers’ reluctance to cover construction risks could disrupt government plans, unveiled earlier this month, to make a single person accountable for safety in an occupied building.

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“It is a wide ranging remit . . . you could see why insurers might be reluctant to dip their toes into a new market,” said Paul Lowe, a partner at law firm Weightmans.



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