Building Safety Bill to drive up PII costs excluding firms

Aaron Morby 4 months ago

Construction experts are warning late Government amendments to the Building Safety Bill will drive up construction professional indemnity insurance for firms driving many out of the housing sector.

Plans to extend the defects liability limitation period to 30 years are being challenged as unworkable.

The Construction Industry Council has warned that the huge increase in level and extent of liability risked shutting SMEs out of the housing development and wider building market and force competent people to be excluded from providing services due to risk aversion within the insurance sector.

The insurance sector itself could undertake its own analysis of the risks and potential costs and potentially walk away from construction, it warned.

Giving evidence to the Levelling Up, Housing and Communities Committee inquiry scrutinising the approach to fixing the building safety crisis, the CIC also said the plan would jeopardise the levelling up agenda.

The evidence highlighted that the proposal to retrospectively extend the limitation period under section 1 of the Defective Premises Act to 30 years, announced by Michael Gove last month, could have dramatic consequences across the industry.

Currently, the limitation period is 6 years from the completion of the dwelling.

A clause in the Building Safety Bill proposed the retroactive extension of the limitation period under the DPA to 15 years and this is now intended to be doubled.

Graham Watts, Chief Executive of CIC said that the move would further add to the insurance pressures across the sector and could have a deleterious impact on the capability to remediate unsafe buildings and build new housing.

He said: “We desperately need to remediate hundreds of buildings across the country and increase the rate of building new homes. Yet these proposals could put this work at risk by making it impossible for companies and people to continue in the sector.

“It is vital these very late amendments must be given greater scrutiny to allow for the passage of a Bill that provides great recompense for consumers but ensures the viability of the construction sector and its ability to help deliver on the levelling up agenda.”

The CIC said that it agreed with the principles set out by Gove that leaseholders should not have to pay to remediate buildings that are unsafe and that those clearly responsible for profiteering at the expense of fire safety should be removed from government schemes that provide them with work or that provide grants, subsidies or loans to their customers.


Latest news

Osborne makes £45m construction loss

Sale of infrastructure business balances books as contractor looks for zero-carbon wins
3 days ago

John F Hunt forecasts record revenue and profits this year

Demolition contractor back on strong financial footing after previously setting aside £5.6m for bid rigging probe
3 days ago

Notting Hill Genesis names £2.8bn framework winners

26 firms land places on main contractor deal: Full list
3 days ago

Green light for dual hotel scheme at Nine Elms

Two new hotel towers will share common basement
3 days ago

Trials start on cement-free pre-cast piles

Aarsleff is hopeful a product will come to the market shortly
3 days ago

Ex-Telford Homes boss to run green house builder

Jon Di-Stefano takes helm at M&G backed Greencore Construction
3 days ago

Subcontractors told to stop work on Brymor sites

£80m revenue southern contractor files letter of intent to enter administration
4 days ago

House builder Chartway sold to private equity firm

Cabot Square Capital signs another major construction deal
4 days ago

Murphy Group appoints new chairman

Capita chairman and investment banker John Cresswell to start in November
4 days ago

Tolent seals £40m Newcastle ‘future-living’ housing job

135-home Vaux scheme will be first of four neighbourhoods totalling 1,000 homes
4 days ago

Cruden takes first job at £1.3bn Edinburgh Waterfront scheme

Preferred bidder named for first 750 net zero homes at new Granton Waterfront coastal town
4 days ago

Trio of student towers to be built at Brent Cross Town

Ground works under way with main contractor due to be appointed next month
4 days ago

Keltbray gets start date for £50m motorway upgrade

Contractor hails "significant step forward" for highways business
5 days ago

Site workers settle for 5% pay increase

Contractors and unions agree one-year deal following months of talks
5 days ago

Rising wages and skills gap to overshadow materials issues

Materials and product Inflation tops 20% so far this year, but labour set to be next big headache
5 days ago

Erith pays £2.8m bonus to staff after ownership switch

Around 450 staff have on average received over £6,000 since move to employee ownership five years ago
5 days ago

Algeco lands £19.2m Leeds modular school scheme

Offsite specialist will supply and install 192 steel frame modules
5 days ago

Eight firms placed on £750m Midlands and Eastern framework

Next generation framework for jobs up to £7.5m employs a parallel plotting structure
5 days ago

Aston Villa unveil plans for £100m stadium expansion

Construction set to start next year on first phase of Villa Park upgrade
5 days ago

Skanska bans ‘swing-up’ lorry loaders after site death

Banned vehicles are used mainly to deliver bulky items like cabins and welfare units
5 days ago

HS2 agrees £78m variation on Euston tunnels cost

Skanska Costain Strabag seals extra payment for agreed changes to the scope of work
6 days ago

B&K breaks ground at £150m Newcastle HMRC job

Work gets underway on city's largest ever office project
6 days ago

New building safety laws come into force today

Leaseholders protected and new regulator for construction product manufacturers in wake of Grenfell
6 days ago

Peel submits plan for £150m cannabis production plant

Isle of Man seeks to become a leader in the emerging medicinal cannabis sector.
6 days ago

Tarmac buys first electric concrete mixer truck

Country's first battery powered mixer truck will start site deliveries this Autumn
6 days ago

Tilbury Douglas wins Dorset hospital upgrade

Construction could start in 2024 after Dorset County Hospital secures £77.3m of funding
6 days ago

McGee in £2.4m provision for bid-rigging probe

Demolition contractor says provision will cover the expected fine over cover pricing ring
7 days ago

First designs for £275m HS2 Midlands nerve centre

Contractor due to be named in Autumn next year for Washwood Heath hub
7 days ago

London Bankside Yards next project switches from resi to offices

Revised plan submitted for 18-storey office next to Blackfriars Bridge
7 days ago

Plans in for Cambridge North major mixed-use scheme

Over 400 homes and nearly 600,000 sq ft of office and shops planned for railway sidings site
7 days ago

Contractor services