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Building control ‘at crisis point’ as inspectors struggle to find insurance cover

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Architects fear a rise in buildings with dangerous defects and delays in project sign-offs as the shortage of building inspectors worsens post-Grenfell

An industry trade body has said building control is at a ‘crisis point’, with building inspectors forced to stop work due to a lack of insurance cover.

A spokesperson for the Association of Consultant Approved Inspectors (ACAI), which represents private building control bodies, said: ’Statutory regulations on professional indemnity and public liability insurance are currently excessively stringent, meaning many insurers are unwilling to provide cover for inspectors. This is creating a crisis point within the building control industry.

’Urgent consideration is needed from the government to attempt to resolve the situation before large numbers of firms of all sizes are forced to cease trading. Failure to act will severely curtail the industry’s capability to sign off safe buildings.’

All new buildings must be approved by an inspector to certify they meet building regulations. However, inspectors can only operate and grant approval if they have professional indemnity (PI) and public liability (PL) insurance. 

Many private building inspectors have downed tools and are referring customers to rival companies or local authorities instead.

The AJ has found at least three companies listed on approving body CICAIR whose insurance has expired.

Aedis, a Darlington-based building inspector which checks buildings for regulatory compliance such as fire safety, has halted operations because of a lack of insurance.

The firm issued a statement explaining that there was only one insurance broker still willing to provide cover – understood to be Griffiths & Armour – but that several firms including Aedis had failed to secure cover. 

According to architects, the shortage of building inspectors could have a big impact on project timelines and on the quality of schemes. 

Alastair Ferguson, associate director at Assael Architecture, said:Other than the confusion, delay and uncertainty this will cause, there is a real risk that a forced change of approved inspector will lead to more buildings with potentially dangerous defects.

’Transferring responsibility for half-completed work to a second inspector, local authority, or combination of the two will require very detailed and precise communication.’

Ferguson added that at a time when the industry is trying to raise construction standards by increasing site supervision and defining clear roles and responsibilities, this will have the opposite effect.

PRP partner Andrew Mellor said earlier in the year a number of other approved inspectors has also lost PI too, for the same reason.

’The continued reduction in approved inspector numbers will no doubt impact on project sign-offs and leave dwellings empty, with the knock-on consequence that those that need homes cannot move in,’ he said.

Mellor said the increased premiums and fire-related clauses in PI was hitting architects, fire engineers, façade consultants, contractors and will ’no doubt affect the design and delivery of housing generally for the next few years’.

Andrew Harrison-Sleap, head of the construction professional indemnity business Marsh said it was an ‘extremely challenging time’ for the construction sector.

He traced the issue with insurance claims back to the recession in 2010 but that insurers were even more cautious in the wake of Grenfell fire, which killed 72 people two years ago this month.

With the legal decision on Grenfell cladding still unresolved, brokers are now restricting or excluding coverage for cladding and fire safety issues, according to Harrison-Sleap.

’In the meantime, there are numerous examples where claims payments and reserves have been made in respect to cladding and fire safety,’ he added.

Harrison-Sleap pointed to the ruling over the Lacross housing block fire in Australia, which found the builder liable but made the architect, fire engineer and building surveyor responsible for the vast majority of the $5.7 million payout.

‘[The ruling] clearly points to all stakeholders involved in the delivery of construction, with the least amount of responsibility being put upon the party starting the fire,’ he said.

  • 5 Comments

Readers' comments (5)

  • This sounds like a perfect storm in the making - a very big one.

    Put the Grenfell Tower tragedy together with the previous Edinburgh schools scandal, the more recent discovery in Persimmon developments in Exeter and elsewhere of many new houses with building completion and NHBRC certificates but no cavity fire stops in the walls - and Carillion's incomplete Liverpool hospital that's been found to have structural problems - and it's not surprising if insurers decide that they want nothing to do with housing construction certification.

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  • This decision is a direct result of the way the regulatory system is set up. How can a regulatory system, whose role it is to take enforcement action when compliance with the Building Regulations is not achieved, do so adequately if it is open to competition? Clearly it cannot and this results in a relaxing of standards increasing the risks not only to insurers but more importantly to the users of those buildings too.

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  • The Lacross ruling sets an interesting and onerous precedent across common law legal jurisdiction, which assists the recently launched civil litigation (of the Grenfell survivors) in the UK, and possibly the USA. The architects have to pay 25% of the total damages awarded ($5.7m Australian = £3.15m), even though it was essentially a D&B contract with novated design, and their contract was caveated with respect to regulatory compliance of suggested materials specifications. The architects’ fee was about $2m Australian (£1.1m) and they are paying out $1.43 Australian (£770,000) in damages. The building had a sprinkler system and it is fortunate that there were no fatalities. I suspect that PII premiums across the ‘Free World’ will increase!

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  • Read $1.43 million Australian in that last post!

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  • I have fallen foul of this situation. I had an offer an accepted on a property that had been recently converted. The developers of this property used Aedis to provide the building regulations certification. Whilst Aedis's situation is unenviable, their customer service is diabolical. They are not answering the phones or responding to emails. Aedis are actively blocking access to the files we need to pass on to the local borough council for retrospective certification, which is outrageous! Meanwhile the developers are losing money and I am sleeping on a friend's sofa as I have already sold my property. What worries me most is that there is no end in sight. I only found out about this through my own diligence having had a gut feeling that something was wrong when this certification was not forthcoming from the developers solicitors. Surely they have a duty to inform me of any situation which will delay exchange and completion? I know I am a novice in terms of this industry but I am learning fast and quite honestly I am appalled. SOMETHING HAS TO BE DONE AND NOW BEFORE THE GOVERNMENT CLOSES FOR THE SUMMER RECESS!

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