UK construction industry must embrace reform to ensure provision of professional indemnity coverage: IUA
The construction industry must embrace reform to help improve the provision of professional indemnity insurance for the sector, according to the International Underwriting Association (IUA).
The IUA called for the UK construction industry to address regulation and culture issues to prioritise quality construction and safety over cost-cutting. A survey by the Construction Leadership Council recently highlighted significant cost increases and the introduction of new restrictions on professional indemnity insurance.
Tightening coverage terms are the result of a considerable period of difficult underwriting conditions and deteriorating claims performance, driven partly by endemic problems within the industry, according to members of the IUA’s construction professional lines working group.
Chris Jones, IUA director of legal and market services, welcomed a proposed overhaul of the regulatory framework in the construction industry, set out in Dame Judith Hackitt’s building regulations and fire safety report, commissioned by the UK Government.
However, Jones stressed that historical liabilities that have yet to develop into claims remain an issue for insurers. “A shift in culture is required in order to overcome continuing uncertainty about the enforcement of regulation and a lack of oversight and accountability in the construction process,” Jones said.
Jones added: “It is clear that the construction industry and professional indemnity insurance market have both experienced extremely challenging business conditions. Insurers have handled a great many claims arising from fire safety issues and the use of cladding, but although high rise residential buildings are the biggest worry there are also more widespread risk management concerns.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
