he insurance market changed radically post-Grenfell, particularly with a significant increase in Professional Indemnity Insurance premiums. The focus on cladding meant that insurers began to perceive any tall building as a higher insurance risk. Some of our clients, who had previously found renewing insurance policies straightforward prior Grenfell, discovered their premiums had increased significantly when the time came to renew. The insurance market for architects has proven to be very challenging, not only have premiums increased but insurers have, on occasions declined to renew policies or imposed exclusions which take essential cover out.
Going forward, the best way for businesses to deal with changes to insurance premiums post-Grenfell is good preparation. Everyone with a Professional Indemnity Insurance policy has to fill in a proposal form with key information about the company, and this should be completed as early as possible – it certainly needs to be completed no less than 30 days before renewal. If you’ve made any previous claims, make sure you include a precise summary which states all information clearly, and give yourself plenty of time to answer any questions that arise.
Professional Indemnity Insurance policies contain a number of exclusions, and it’s vital for businesses to understand what these exclusions mean. Post-Grenfell, companies in the construction industry require policies covering work they are yet to start as well as previously completed projects. This could potentially leave a company in a difficult position if they are unable to find the right cover by the time their current policy runs out. For this reason, it’s important to make sure you have a very early conversation with your broker or insurer to understand how the work you have previously completed sits within the exclusions of a policy.
The impact of the Grenfell Tower fire on the insurance market is expected to continue for the foreseeable future, so it’s important to build a good relationship with your broker and/or insurer. This will lead to a shared understanding of the risks and sector trends within an industry and help to achieve the best coverage possible.