Professional Indemnity insurance Scheme Renewal – 2021 - 22

consultants, along with the opportunity the Building Safety Bill brings to introduce some of them, will not solve the immediate crisis for those affected by dangerous buildings. Having regard to our research of the available cover in the marketplace and the liabilities that consultants are still being asked to assume, we are forced to conclude that the only option that will deliver the required clarity and financial support for those undertaking this urgent work is Government intervention. We will continue to update you separately on these specific issues, as this area would simply consume all the space available for this update. Whilst these particular aspects of fire safety cover will be of more relevance to those working in England and Wales, insurers’ concerns are not limited to any one jurisdiction or building type. Fire safety and indeed the broader question of the quality of buildings is now a global issue, that has far reaching implications for consultants and contractors operating across and indeed outside the UK and Ireland. The typical insurer response In the here and now, there is little doubt that the insurance market has continued to reduce and remove cover in relation to fire safety liabilities. Some actions have been clear and explicit, others more subtle but with real implication. We have seen policy language from various bodies, such as the RICS and the International Underwriting Association (‘IUA’) (the voice for non-Lloyd’s insurance companies in the London Market) which provide for a scope of cover which limits policy coverage quite significantly. Similarly, we have had continuing dialogue with the broader market on the nature of the cover they are prepared to offer, to whom and on what terms. Without exception, the insurers with whom we have engaged are limiting cover further and some are adopting an increasingly ‘standard’ position which is to take some (or all) of the following approaches: • Restricting coverage to claims arising from negligence only (i.e. the policy excludes contractually assumed liabilities which go further than imposing a duty of ‘due skill and care’). • Further limiting cover to apply to the actual costs of ‘rectification’ only. This means that cover applies only if and to the extent that the claim is for the cost of the re-performance of the insured’s work, or for rectification costs. Claims for delay are therefore not generally covered.