Insurance premiums soar 1000% for cladding firms

Aaron Morby 9 months ago
Share

Cladding contractors are facing astronomical rises in professional indemnity insurance in the wake of the Grenfell disaster.

Insurers and brokers are quoting sky-high prices with some upping quotes by up to 1000%.

The sudden change in the insurance market is threatening firms at a fundamental business level with some warning they will be forced to invoke contract clauses that allow for PI not to be offered if commercial rates are no longer reasonable.

If mirrored across the industry, many specialist could be forced to operate without cover leaving the industry exposed when it is under intense Government and public scrutiny.

“Insurance companies are hammering the industry when the new facades being designed and built now are with non-combustible materials in agreement with developers, main contractors and the specialist sub-contractor meaning the risk is in fact reducing,” said the boss of one cladding specialist.

He told the Enquirer that his firm – which turns over £20m-£30m – usually paid under £20,000 for PI.

He said: “We are now getting quotes ranging from £215,000 to £240,000. It’s utterly ridiculous.

Then we are told claims arising from combustibility of cladding materials are now expressly excluded, including historic projects.

“And we have never paid out a claim on our PI”

He added: “We are now considering increasing our excess from £200,000 to £500,000 or more in an effort to mitigate the increased cost.”

Another £20m turnover firm said it was experiencing similar problems with PI renewal post-Grenfell.

It said: “The indications are not good going forward as brokers and insurers alike are advising that PI will only become more expensive in the coming years, that’s if they will offer it to companies that are involved in our industry.

“Our premium was £14k before but the best offer we have to date is £42k for £10m PI. We are looking to significantly reduce our excess and are being told we may end up being forced to pay closer to £100k.”

Another specialist contacted by the Enquirer said: “We have heard about crazy quotes coming back.

“We don’t renew until the spring, but rest assured if quotes come back at the levels we are hearing we will be invoking the clause in all previous collateral warranties which states ‘always providing such insurance is available in the market a commercially reasonable rates'”.

Latest news

Willmott homes arm fined £1.25m over gas blunder

Court hears how residents were put at risk of carbon monoxide poisoning
1 day ago

Eggborough gas-fired power station gains consent

Work could start by summer next year at North Yorkshire site
1 day ago

£100m Aberdeen Broadford Works village plan approved

Demolition work to start at historic former textile factory site
1 day ago

Go-ahead for £160m Leeds Monk Bridge scheme

McAlpine is on board as preferred contractor for the project
2 days ago

Opinion: Safety fines are getting out of control

We need more effective ways to improve safety than ever higher penalties
2 days ago

Shake-up for £2.9bn MoD hard FM contracts

Post-Carillion bid race for MoD estate and housing regional FM contracts
2 days ago

Wates set to start on £53m Portsmouth sports centre

Contractor understood to have won contract race for new university complex
3 days ago

Lack of skilled roofers prompts Marley new launch

Easy to install roofing roll compensates for lack of skilled workers
2 days ago

Caddick takes workforce plastic-free

Workers given aluminium drinks bottles in bid to bin single-use plastics
2 days ago

Wates wins 7th Leeds Wellington Place job

Work will start of £35m 4 Wellington Place project next month
3 days ago

Kier targets £50m disposals to cut £375m debt

Firm sets out debt reduction plan in robust year-end results
3 days ago

Betting Spy: Spurs to shrug off recent troubles

Tottenham can kick-start a win treble with Leicester and Crystal Palace
2 days ago

Keltbray concrete structures boss exits

Keltbray Structures MD Gordon Dunne on gardening leave
3 days ago

141 jobs axed as M&E specialist George Birchall fails

Larger FM business George Birchall Service avoids administration
3 days ago

Morgan Sindall bags £384m London scheme first phase

Hackney scheme includes an academy, leisure centre and six blocks of flats
3 days ago

Mace confirms £180m Olympic Park East Village deal

Firm will fine-tune its 'rising factory' method on the No6 East Village project
3 days ago

Contractor trials mixed reality headsets on school site

BIM and Microsoft HoloLens used to check M&E work
4 days ago

PM pledges extra £2bn for housing associations over 10 years

Longterm funding will be made available from 2022-2029
4 days ago

Jacobs to lead Edinburgh city centre transformation plan

Team will set out plan for historic overhaul of streets and public space
4 days ago

Costain and Galliford Try fined £2.8m after worker loses toes

Massive fine after accident at Cheshire water treatment works
4 days ago

Boost your online presence – join the new Enquirer Directory

New site for suppliers and buyers will showcase their products, services and latest stories
5 months ago

Van Elle shareholders stage AGM revolt

Shareholders block board's ability to issue new shares for acquisitions
4 days ago

£100m Bristol sports arena plan at Ashton Gate stadium

Sports and convention centre will be attached to Lansdown Stand
4 days ago

Balfour Beatty raises £43m from hospital stake sale

Balfour sells 50% stake in Fife Hospital PPP
4 days ago

Kier offloads pensions unit for £3.5m

Third party pension management business administers half of all police pension
5 days ago

Willmott Dixon clinches £38m Winchester sports centre

Work to start in Spring 2019 on major leisure and sports complex
4 days ago

Architect TP Bennett reaches record turnover

Manchester office grows on back of city building boom
4 days ago

Brexit migration plan would “cripple construction”

Industry pleas ignored over need for steady flow of low-skilled site workers
5 days ago

Wates wins £16m Stockport college revamp

Work is due to start in the early new year on Wellington Road Campus
4 days ago

Balfour Beatty pioneers plastic pylons in Scotland

140 composite poles installed by new helicopter crane in just five days
5 days ago

Contractor services