Key Takeaways

Sustainable materials offer an alternative:

Design is key. Early engagement is necessary to avoid potential problems further on in the construction process when it’s comes to procuring the necessary insurance. We have already seen examples of this positive collaboration between clients and insurers.

It is imperative that all project stakeholders understand the nuances of using alternative sustainable materials compared to well established and understood traditional frame construction methods. There is a lack of companies that fully understand or have experience dealing with these new materials and this is a concern for the insurance market.

The necessity of weather proofing:

Fire and water damage remain the key concerns for insurers. In particular rainwater damage is increasing and has led to significant claims. In particular for cross laminated timber (CLT), consideration needs to be given to the storage of the material, reducing the chance for moisture to affect the structural integrity etc. These are the factors that insurers are continuing to place greater scrutiny on.

The insurance market has seen large claims arising from the use of sustainable building materials that were not correctly installed and have led to water damage and defects. So this continues to be an area of diligence on insurers’ part and they want to see sufficient and suitable risk management practices to mitigate these risks.

Retrofitting presents both challenges and opportunities:

The approach towards retrofitting needs to be risk engineering from day one and needs a different approach than a standard new build project.

Sometimes due the age of the property, contractors/developers may not be able to gather enough information on the building and this can result in hidden issues surfacing. Therefore, it is key to do thorough, upfront due diligence (condition surveys etc.) on the building to avoid unforeseen issues later down the lifespan of the project.

There can be friction between the construction and property insurance markets on refurbishments as at their core construction insurers want new build projects and property insurers want operational buildings. This can cause difficulty for clients. However, collaboration and early engagement are key to manage expectations and ensure a better insurance experience for clients.