The membership organisation presents five calls for action to help facilitate access to affordable PI insurance

Broker membership organisation Biba has outlined five calls for action within its 2020 manifesto, urging the government and industry to do more to tackle the “severe shortage of professional indemnity insurance” for those working in construction.

Biba stated that approved building inspectors, fire safety officers and those involved in the certification, design and construction of buildings, especially high-rise residential buildings, are struggling to obtain professional indemnity insurance; individuals who are able to purchase this cover are doing so at significant cost.

This is having a knock-on effect on the housing sector as a whole, said Biba, with businesses being forced to close, housebuilders and developers losing sales, lenders failing to lend and recommendations from the Independent Review of Building Regulations and Fire Safety: Final Report, also known as the Hackitt Report, published by the Ministry of Housing, Communities and Local Government (MHCLG) in May 2018 following the Grenfell Tower fire, not being implemented as quickly as the industry would like.

At its manifesto launch event at the House of Commons yesterday, Biba further explained that run-off cover in this sector was also difficult, as holding insurers have not always agreed terms.

To combat these concerns, Biba has made five calls to action – it will liaise with the government to achieve these.

  • A review of building regulations so that they can be simplified, modernised and made more relevant for mitigating and controlling the risk of fire in high-rise residential buildings.
  • Implementation of the Hackitt Report recommendations with regards to the division of responsibilities between the various parties involved in a building project and its ongoing certification – this aims to spread the current onus that is placed on approved inspectors and fire safety officers, making professional indemnity risks more palatable for insurers.
  • Continue working with the MHCLG to review the insurance requirements and obligations placed on approved inspectors and fire safety officers so that these can be more closely matched to what the market can realistically offer.
  • Simplification of the process whereby residents can apply to the £200m government fund to finance the replacement of unsafe aluminium composite material cladding (ACM) on high-rise residential properties where building owners have failed to do so.
  • For a greater commitment to provide run-off cover from insurers when a business closes, or a partner retires.

Carl Evans, partner and group chief executive, professional risks at Griffiths and Armour, added: “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.”