, published in September, marked an end to the seven-year probe into the horrific apartment block fire that took the lives of 72 people on 14 June 2017.\u00a0<\/span><\/p>\nThe report and the government’s response yesterday (26 February) is far from the end of the road, however, when it comes to righting the wrongs that led to the disaster. It is, instead, a significant milestone in a bigger journey for the construction industry more widely. It provided some answers but, in doing so, opened the floodgates to further questions.<\/span><\/p>\nOne such question concerns the future of professional indemnity.<\/span><\/p>\n\u201cThe Grenfell report set out recommendations that, if implemented, will have a positive impact on professional indemnity claims\u201d<\/span><\/p><\/blockquote>\nProfessional indemnity insurance covers the cost of compensating clients for loss or damage resulting from negligent services or advice.<\/span><\/p>\nThe Grenfell tragedy had a significant effect on this insurance market. It caused insurers to withdraw cover, charge higher premiums and place limits on how much indemnity cover industry professionals, including contractors, could claim.\u00a0<\/span><\/p>\nThese factors caused some to withdraw from the market, and those who stayed resorted to taking on work with inadequate professional indemnity insurance in place: a position with enormous risk for the effectively uninsured business and the industry more generally.<\/span><\/p>\nThe introduction of the Building Safety Act 2022 compounded the problem by imposing greater obligations on designers, contractors and building-control bodies. These new obligations were coupled with an increase in the limitation period for professional indemnity claims to 30 years, up from the previous 15-year span, paving the way for more claims to be made.\u00a0<\/span><\/p>\nDespite wider hopes, the phase two report was not intended to be a complete roadmap for fixing building safety, nor to provide a clear update on how existing legislation would be updated and implemented following the inquiry.\u00a0<\/span><\/p>\nInstead, it was far more reflective and explored holistically what the construction industry could learn from the bad practices and structural shortcomings the disaster brought to light.<\/span><\/p>\nReducing risk<\/span><\/h3>\nThe report did, however, set out a few recommendations that, if implemented, will have a positive impact on professional indemnity claims.\u00a0<\/span><\/p>\nIt recommended the introduction of a licensing scheme for contractors working on high-risk building projects that would ensure they have adequate skills and expertise to undertake such projects.\u00a0<\/span><\/p>\nThe report also recommended that it be made a legal requirement for all building-control approval applications to be supported by a personal undertaking from a director or senior manager of the principal contractor.\u00a0<\/span><\/p>\nThese changes could significantly reduce the future risk of claims and improve the competency of the industry as a whole.\u00a0<\/span><\/p>\nThe potential benefits of the report\u2019s recommendations will not immediately come to fruition, however, due primarily to the breadth of the investigation and length of time it will take to address the systematic failures it unearthed.\u00a0<\/span><\/p>\nAs clouds of uncertainty linger over professional indemnity, insurers and contractors alike must remain cautious. This past year, we have seen a slow relaxation of policy restrictions and, while it is positive that these changes are happening, it will be a while before the industry is able to see the benefits.\u00a0<\/span><\/p>\nIt is important that we keep a watchful eye on how others, in particular government bodies, react to matters in the meantime. It seems likely that further guidance from the courts will be on the way, which may provide additional clarity.<\/span><\/p>\nThis would prompt indemnity providers to relax restrictions further \u2013 a move that design and build contractors, and construction professionals, would surely welcome. In the meantime, it is a case of wait and see.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Quentin Fox is a partner and head of professional risk at law firm Weightmans The final Grenfell Inquiry report, published in September, marked an end to the seven-year probe into the horrific apartment block fire that took the lives of 72 people on 14 June 2017.\u00a0 The report and the government’s response yesterday (26 February) …<\/p>\n","protected":false},"author":1,"featured_media":510951,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[578,567],"tags":[],"yoast_head":"\n