Fire Safety ' At Last, Some Welcome News For Surveyors

• Published date: 16 April 2021
• Subject Matter: Insurance, Insurance Laws and Products
• Law Firm: Reynolds Porter Chamberlain
• Author: Ms Alexandra Anderson and Katharine Cusack

We set out below news of a welcome change to the professional indemnity insurance available to surveyors relating to their fire safety work.

History

The last 18 months have been a turbulent time for both professionals and homeowners and not just because of the pandemic. The market has been locked whilst mortgage companies, insurers and surveyors have been grappling with the issue of fire safety for multi-occupancy residential buildings in the wake of the Grenfell tragedy.

It is imperative that professionals have adequate and appropriate insurance cover for the work they undertake. However, the uncertainties relating to fire safety and the evolving legislation have resulted in many insurers placing exclusions on their policies, meaning that many firms have been unable to provide advice on properties with fire safety issues due to a lack of available insurance. Due to the "claims made" nature of PI policies, this has also left firms uninsured for work they had carried out at a time when they were insured for fire safety risks.

We have previously explained some of the changes put in place by RICS to try to unlock the market (please click here for more information). We have also been advising RICS on disclaimers that professionals can use to minimise the risk of claims, for the benefit of both the professionals and their insurers.

Changes to Minimum Terms

After the last changes to the Minimum Terms came into effect in May 2020, a number of insurers imposed a blanket ban in their PII terms on all fire safety work undertaken by surveyors. This left many surveyors exposed and uninsured in relation to their fire safety services, past and present. On 1 April 2021, the RICS new Minimum Policy Wording came into effect. We believe the new policy terms will be a welcome change to those previously unable to obtain fire safety cover.

The new minimum terms now confirm that, although fire safety exclusions will still be permitted in PI policies, "any exclusion will not apply to...