New insurance clause aims to accelerate unsafe cladding removal works

Insurers and the government have developed a new insurance approach that could speed up removals of unsafe cladding, such as that involved in the Grenfell Tower disaster.

The International Underwriting Association (IUA) said it hoped to resolve what had been a “difficult” market for firms seeking cover.

It worked with the Department for Levelling Up, Housing and Communities (DLUHC) to produce a clause that can be adopted by any underwriter providing professional indemnity insurance for work under the government’s £4.5bn Building Safety Fund.

Using the clause would will help speed up the removal of unsafe cladding, encourage a greater safety culture in the construction industry and provide insurers with increased confidence in the industry’s risk management processes, the IUA said.

Levelling up secretary Greg Clark said: “Our priority is making sure people’s homes are safe and that safety standards are high.

“Alongside our tough new regulatory regime, this new clause that has been developed with my department will help us do just that.”

The IUA said the new clause set out key risk management processes that would ensure work was conducted within recognised industry standards to improve safety accountability and foster investment in quality construction.

Chris Jones, the group’s director of legal and market services, said: “The market for construction professional indemnity insurance has been difficult in recent years, reflecting concerns about the potential for historic liabilities to develop into future claims following the Grenfell Tower tragedy.

“Each new risk must continue to be assessed on a risk-by-risk basis, of course, but the clause should provide underwriters with greater confidence to offer effective insurance solutions for future work.”

A survey of IUA members in September last year found around two-thirds would offer only a limited form of cover to underwrite fire safety risks on new projects to remove defective cladding from high-rise buildings, and just 4 per cent were happy to offer unrestricted protection.

In June, the Government banned the type of cladding used at Grenfell Tower from further use in England. Ministers have also announced plans to outlaw metal composite material panels with an unmodified polyethylene core.

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