Grenfell and cladding: double indemnity

JEGP0T

The construction industry has a huge task ahead to re-clad high-rise buildings. But restrictions to insurance cover is causing a shortage of companies willing to take on the work

JEGP0T

Source: Christopher Middleton / Alamy Stock Photo

In the immediate aftermath of the tragic blaze at Grenfell Tower, the construction industry’s insurers were among those caught in the headlights of the appalling tragedy, frantically trying to calculate how to respond. It is now clear that many did so by pulling cover or vastly increasing premiums, often for businesses with few other places to turn. One consultant with his own business inspecting roofing and cladding systems told Building: “My insurer turned round and told me he wouldn’t give me public liability cover and that my expected renewal price for professional indemnity had gone up 14-fold. I was told it was take it or leave it. Some of my competitors were point blank refused cover and were considering packing in their businesses. The insurers were in absolute panic.”

This consultant eventually managed to shop around and find cover elsewhere – but at a premium two-and-a-half times the previous cost, and with significant restrictions on his business. Nearly one year on from Grenfell, and though the immediate panic may have subsided, the evidence suggests insurance – particularly professional indemnity – is still a major problem affecting any construction businesses that work on cladding systems or on high-rise buildings. So how bad is the situation, and what, if anything can be done to ease it?

“My insurer told me my expected renewal price for professional indemnity had gone up 14-fold. i was told to take it or leave it”

Consultant

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