Some thoughts on the further uncertainty over cladding removal, and who pays the bill, from Pete Newson, who is Head of PI Underwriting at Euna.
Reports of a delay to the Government’s proposed Cladding Remediation Bill signal the prolonging of uncertainty around future statutory duties on developers and property owners. This is unlikely to provide any near-term relief to the Professional Indemnity market. This lack of legislative clarity impacts the Professional Indemnity insurance market, as pricing and capacity decisions are fundamentally underpinned by well-defined liability frameworks.
Ultimately, the delay reinforces insurers’ conservative underwriting stance, sustaining higher premiums, restrictive terms, and limited appetite for cladding and fire-safety-related risks across architects, engineers, surveyors, and construction firms.
Professional Indemnity insurers rely on certainty as to where long-term responsibility ultimately rests — whether with developers, building owners, or other statutory duty holders. Continued ambiguity complicates insurers’ ability to model exposure accurately and assess worst-case loss scenarios. In the absence of definitive new legislation, insurers are therefore likely to remain cautious in their approach to both historic and future cladding-related risks, particularly where liability may be revived or extended under existing regimes such as the Building Safety Act 2022 and the Defective Premises Act.
This caution is compounded by the fact that Professional Indemnity policies were already under sustained pressure following recent building safety reforms, which significantly expanded potential exposures for design and construction professionals through extended limitation periods. The availability of retrospective cover for historic cladding risks has been materially constrained for some time, and the delay to the Remediation Bill does little to alleviate this position.
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