Nearly one year on from the fire that killed 72 people, the insurers and their broking partners are still figuring out their position on what it means for premiums and the scope of cover for those in construction. The situation is one of crisis. Crisis for many construction consultants whose job it is to provide advice on residential towers or tall buildings but who are seeing their professional indemnity insurance premiums soar. A crisis for the many building owners who are, as a result, struggling to find access to specialist advice for crucial and sensitive works on buildings at risk. And a crisis too for the many roofing and cladding contractors facing the prospect of going out of business as they are denied any cover at all. 

Insurers hate uncertainty. And with Dame Judith Hackitt’s review into the construction sector imminent and the interim report late last year already having fired a starting gun for lawyers to earn a fortune, it’s easy to see why there is uncertainty and why the insurance industry is still struggling to assess the financial fall-out of the disaster and the future risk associated with all those involved in the sector.

Insurers themselves have too often provided cover for unsafe buildings without the necessary checks and oversight

What is happening is that construction firms and their insuring partners are being hit by a triple whammy. First, the technical and testing regimes of construction products and procedures, which have always been a convenient box-ticking exercise that allowed underwriters to sign off cover in the name of compliance, are being scrutinised heavily and this is causing huge confusion.

…