Lack of access to affordable Professional Indemnity cover for those working in the construction sector has urged the broker membership organisation Biba to outline five calls for action within its 2020 manifesto in a bid to ram up support from the industry and the government to tackle the “severe shortage of professional indemnity insurance”.
The housing sector as a whole is feeling the consequences with many businesses being forced to close, lenders being reluctant to lend finance and sales being lost due to the fact that building inspectors are unable to access PI cover. What PI cover is accessible is extremely costly and most building inspectors are struggling to obtain any affordable cover. This difficult has been aided by the rather slow implementation of the Hackett Report since it was published in May 2018.
Five calls to action have been made to combat the problem of run-off cover in that terms have not always been agreed with holding insurers.
A review of building regulations – modernise, simplify, more relevant to mitigating fire risk
Implementing recommendations made by the Hackett Report. This includes insuring that all parties involved in the construction process are assigned responsibilities for their area. This is a bid to spread the risk management aspect around all areas so that less of the onus is on inspectors meaning that PI cover should be more obtainable if insurers are taking on less risk.
Continue working with the Ministry of Housing, Communities and Local Government (MGCLG). The market is typically not currently able to match the requirements of inspectors and fire safety inspectors in order for their obligations to be covered. By reviewing the obligations and requirements with the MGCLG, it is aiming to close the gap between market offering and inspector requirements.
Simplification of the process for applying for finance to replace aluminium composite material cladding on high-rise buildings where the owners of the building have failed to do so. The government has currently set aside £200 million in funding to replace unsafe cladding.
Greater commitment – To tackle the issue of run-off when an insurance company closes
Partner and Group Chief Executive at Griffiths and Armour, Carl Evans stated “It is difficult to cater for some professionals in the current market, but if the changes Biba is calling for are made, I am hopeful the broking sector can negotiate improved terms with the market”.