Insurance providers warn of price hike following Building Safety Act amends

A number of financial players have expressed concern over the wider impact of the new Building Safety Act 2022, which was drafted to tackle issues since the Grenfell Tower disaster and aimed at increasing health and safety measures in a bid to save lives.

David Jones, CEO & National Chair of the FBE, commented: “It’s hard to be opposed to a Bill that is intended to save lives and indeed for clarity we are not opposed to it, but what we do have are concerns on the financial implications for the industry. Measures which eventually will become part of a ‘new normal’ increased price in construction, all of which will likely be passed to the end customer in some way – home owners, business owners and the like. In an already tough and volatile raw material and supply chain market and ever-growing procurement difficulties combined with the PI insurance implications, it seems fair to have further debate on this.”

Lee Chapman, Head of Professions and London Market Placement at Lloyd’s of London Broker PIB Insurance Brokers, commented: “The new building safety act represents a significant shift in respect of Professional Indemnity Insurance requirements. Since Grenfell, the market capacity has reduced and in some cases insurers have removed cover for any aspect of fire safety. The market is now expected to provide a policy with 30 years retrospective cover, which is going to be challenging for most carriers. I would add even if the market was willing to provide this cover the premiums and excesses would probably be unpalatable and put significant strain on our clients balance sheets.”

 

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