Towergate Insurance: Undoubtedly the Grenfell Tower fire has had a significant impact on the construction sector. A major consequence of Grenfell is the increased difficulty in obtaining Professional Indemnity insurance at ‘commercially reasonable rates’. What constitutes commercially reasonable depends of course on all circumstances, but would a policy with significantly increased premiums, higher excesses and additional exclusions and limitations still be considered commercially reasonable?
We are seeing Professional Indemnity premiums and terms go this way for clients involved in the construction sector, even where they are not directly involved with cladding.
Of course larger companies may be able to take this hit financially but for the majority of SME’s a significant rise in Professional Indemnity Insurance premiums may prove difficult to absorb.
Ultimately, the position on insurance for those involved in construction and having a PI exposure is characterised by uncertainty. Contractors and professionals engaged in this line of work are faced with increasing difficulties in obtaining and maintaining PI insurance cover.
What’s certain though, is a request for higher limits and ‘Any One Claim’ cover will be significantly inhibited by very significant increases in premium costs.