The aftermath of the tragic Grenfell Tower fire last year has had a far-reaching impact on countless individuals, authorities and businesses. The negative spotlight on cladding materials, which are reported to have aided the spread of the fire, has had a major knock-on effect for the construction industry, from builders and subcontractors to architecture firms.
Days after the incident, cladding installed on buildings more than 18 metres in height was called into question by the Government, leading to significant increases in premiums for Professional Indemnity Insurance. Nottingham-based architecture firm Church Lukas experienced first-hand the difficulties of navigating the confusion circulating within the insurance world to keep their risk profile in true perspective.
John Freeman, Director of Church Lukas, said: “The insurance market changed radically post-Grenfell. With the media focusing mainly on cladding, and a public enquiry underway, insurers perceived any tall building as an insurance risk. Prior to Grenfell, insurance was very straightforward – we would receive our policy renewal form, complete it and send it back. Premiums would fluctuate slightly, but post-Grenfell they have increased significantly.
“When it came to renewing our policy, we faced an increase in premiums, but also a reluctance on the part of insurers to cover previously completed buildings above 18 metres without the inclusion of onerous caveats. As we work in sectors including student accommodation, residential, office and industrial this presented a particular problem.”
With Church Lukas in the difficult position of needing to find a new policy at very short notice, independent insurance broker Russell Scanlan, also based in Nottingham, was able to find a solution. John said: “The Russell Scanlan team was very thorough in going back to the insurance market and explaining what we did differently to reassure them. It was a case of navigating the market at a time when there was significant upheaval across the construction sector, both in terms of contractors who deliver the work and architects who design the buildings.”
He continued: “Russell Scanlan worked doubly hard to ensure that we had an insurer in place when we got to the point of renewing our insurance policy. Thankfully, we now have policy which covers buildings we’ve already completed and ones we are yet to start, which is not significantly different from our old policy. For us, that was a positive result, if we hadn’t been able to renew our policy on favourable terms we would have been left in a very difficult position.”
Bryan Banbury, Managing Director of Russell Scanlan, said: “The insurance market for architecture firms has proved to be very challenging due to the implications of the Grenfell Tower fire. Professional Indemnity Insurance underpins the business of architects, but many have found insurers are reluctant to provide cover.
“In the case of Church Lukas, we found the information necessary to obtain quotes on their behalf and approached the market. Through some long-winded negotiations, we managed to find a solution they were happy with in terms of both cover and additional services to assist with checking contract wordings. We’re pleased to say they now have a stable insurer and we’re delighted we could help.”
Church Lukas, which is based in Nottingham city centre close to Russell Scanlan’s offices, is an award-winning architecture firm which operates across the construction industry, ranging from £50,000 minor refurbishments to £100 million regeneration schemes.