Insurance woes could force more approved inspectors under
Image: Dreamstime / Bogdan Hoda
A lack of insurance cover could see approved inspectors (AIs) cease trading “en masse”, resulting in major disruption to projects across the UK, the government has been warned.
The Association of Consultant Approved Inspectors (ACAI) has urged new housing secretary Robert Jenrick to review the government-regulated AI scheme of insurance, amid fears that private inspectors are struggling to obtain the cover they need.
Private building inspectors must hold professional indemnity and public liability insurance to trade in the UK, which enables building owners to claim compensation if any faults signed off by inspectors are discovered after construction.
The government sets the terms of this insurance but ACAI claimed they were too stringent to be commercially attractive to insurers. Following the Grenfell Tower fire, many insurers have now withdrawn from providing new contracts, market meaning private inspectors are unable to renew their terms, forcing them to cease trading.
ACAI highlighted the examples of three AIs, which it said were responsible for more than 5% of live UK construction projects, which have already ceased trading. And it warned that by the end of October, a total of 15 firms will be forced to cease trading due to lack of insurance cover, representing more than 15% of all live projects.
The organisation previously had discussions with Jenrick’s predecessor, James Brokenshire, who met with industry representatives at a roundtable in July. It urged Jenrick to take “urgent action”, either through changes to the terms of insurance or through government backing for AIs while the industry develops its own long-term solution.
'Cusp of disaster'
Paul Timmins, chief executive of the ACAI, said: “The government is on the cusp of a disaster of its own making if it does not act now on AI insurance.
“If private inspectors are forced to cease trading en masse there will be significant job losses in the sector and major projects delays which will hit the construction industry hard, as well as the government’s own housing ambitions. It simply is not enough to hope that overstretched local authorities will be able to pick up the pieces.
“The government must consider the impact on consumers. Even where local authorities can pick up private sector projects, they are not obliged to hold insurance cover for consumers, leaving consumers with less protection, and there are significant costs associated with the transfer of projects.
“We have been engaged in a constructive dialogue with the government in recent months, but the time for talk is over. The government must take responsibility for action now or wake up in several weeks’ time to a crisis which it could have prevented.”