In today’s problematic construction industry, building design businesses are finding it difficult to find assurance through insurance.
In the wake of construction related disasters that include London’s Grenfell Tower fire and the LU Simon Lacrosse tower fire in Docklands, Melbourne (with the Victorian Civil and Administrative Tribunal (VCAT) ordering LU Simon to pay an amount of more than $5.7 million to Lacrosse apartment owners), construction and building design companies are finding it more and more difficult to attain affordable insurance coverage.
Adam Richardson, Honan Insurance Group (Honan) construction industry lead, reveals that insurers are now aiming to cover profitable building design business ventures, and do not support unprofitable businesses who have suffered multiple professional indemnity losses.
Faulty cladding was cited as the source of London’s Grenfell Tower fire and Melbourne’s Lacrosse apartment tower fire. And, say experts, more than 5,000 Victoria structures include the structural defect of non-compliant cladding. Insurers are aware of this, and are planning policies accordingly.
Flammable cladding was also cited as the cause of a fire at Melbourne’s Neo200 apartment complex.
Now architects, building surveyors and engineers are finding it harder to get Professional Indemnity coverage sans exclusions regarding noncompliant cladding. This coverage is needed in order for businesses to comply with their licenses.
Honan is currently helping building and construction clients to cover themselves in these tough times—most literally.