UK Building Safety: IUA publishes fire safety clause for residential tower repairs

The International Underwriting Association has worked with the UK Government’s Department of Levelling Up, Housing and Communities to develop a new model insurance clause for residential tower repairs.

Unsafe cladding and a poor safety culture amongst some construction companies in the UK have together left insurers with little confidence in the industry’s risk management processes. It is hoped that the new clause will help change this.

Chris Jones, IUA director of legal and market services, said: “Our new model clause sets out a number of key risk management processes that will ensure work being carried out is conducted within recognised industry standards. This will help improve accountability for safety measures and foster an investment in quality construction.

“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 revealed what the IUA describes as a “cautious willingness” amongst its members to underwrite fire safety risks on new projects to remove defective cladding from high rises. Around two thirds of respondents stated they would provide a limited form of cover. Four per cent said they would be happy to offer unrestricted protection.

Despite the considerable lack of progress made by the UK Government on building safety issues in the years since the Grenfell Tower fire, Levelling up secretary, Greg Clarke insists its priority is to “make 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," Clarke maintained. “We welcome the work of the IUA and the underwriters who are taking a proportionate approach to fire safety cover and I thank insurers in advance for using it.”

Copies of the IUA Building Safety Fund Cladding and Fire Safety Limited Exclusion and Aggregation Clause can be downloaded here

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