Bursting with Premiums and Excesses

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Housing Secretary Robert Jenrick MP has announced on the 2nd April 2020 ambitious steps to further reform the building safety system. One of the key measures includes mandatory sprinkler systems and consistent wayfinding signage in all new high-rise blocks of flats over 11 metres tall. 

Although most insurers have been concerned with the impact of the cladding concerns of high-rise buildings, the enforcing of sprinkler systems is potentially likely to have an equal impact on your insurance policies going forward. 

In 2018, it was reported by the ABI that escape of water claims were costing the insurance industry on average around £2.5 million per day. Although, traditionally the majority of these escape of water claims have been small leaks on domestic households, escape of water claims have been significantly increasing on high-rise buildings, which can potentially result in several million pounds worth of damage each and every loss. Pressure to use cheaper materials and short timescales have often been associated as possible causes for such losses. 

This has already resulted in higher premiums, higher excess and fewer insurers wanting to write Contractors All Risk and Property Owners policies for new build residential high-rise properties. 

Why pay such high premiums and high excesses where there are potential risk management solutions which prevent these costs?

Some of the key insurers in the industry have come together to agree the ideal risk management solutions which, if you agree to, could help keep premiums and excesses considerably lower. These are in respect of the water management on site and having automatic leak detection systems in place which continue to be reviewed and updated. 

For further details see https://cireg.org/library.html

To learn more how these regulations affect your Contractors all Risk and Property insurances going forward contact us today.

http://www.reichinsurance.co.uk/our-services/construction/ 

Tags: Cladding | Grenfell | contractors | developers | Property | Construction | housing | ABI | CIREG