Whilst each client’s insurance requirements will be considered on an individual basis there are some changes which will apply across the board forming a central component and the basis of cover under the new facility.

Notably, we will no longer be able to offer cover on the exclusive Griffiths & Armour Approved Inspectors Professional Indemnity policy wording. At renewal your policy will be transferred to the Royal & Sun Alliance Insurance Limited (RSA) Property Professionals Professional Indemnity policy wording, with the policy documentation being provided by RSA.

In addition, all policies will be subject to some standard endorsements. More details of the changes in policy terms will be provided at renewal. However, some significant changes include:

• The Limit of Indemnity for statutory services will change from an ‘each and every claim’ basis to an ‘aggregate’ basis, inclusive of defence costs.
• For Fire Safety Notifications there will be a number of important changes:
  • The definition of Fire Safety Notification will be expanded. From renewal, the definition (and the significantly restricted cover applying to those claims deemed to be a ‘Fire Safety Notification’) will apply not only to external cladding systems but also will include:
    • roofing systems
    • internal fire protection systems
    • the fire performance of a building or structure;

Although this definition has become market standard and commonplace on all construction PI policies, it is a very significant amendment to the previous position under the mandated arrangements.

• Just as significantly, a retroactive date will apply from the renewal date. This means that insurers will not have any liability for any Fire Safety Notification relating to work undertaken before inception of the new policy.

• From renewal, different inner aggregate limits are likely to apply for Fire Safety Notifications to those which applied under the expiring policy. The limits will be negotiated on a case by case basis, but we anticipate that insurers will generally be prepared to offer a minimum limit of £1,000,000 in the aggregate, including defence costs.

The new Fire Safety Notification provisions are a significant restriction on cover, but they bring AI clients into line with the overwhelming majority of PI policies which are placed for other construction professionals.

One area where we have been forced by the insurance market to go further and which we need to highlight is the retroactive date, which removes cover for any Fire Safety Notifications relating to historic projects. We recognise the significance of the change, but this was a key requirement of the new insurers that we were forced to concede in order to renew the facility.

As you’ll be aware, due to the claims made basis of Professional Indemnity insurance it is particularly important that any claims, or circumstances that might lead to a claim, are notified to your insurers PRIOR TO expiry of the current policy. In the case of any Fire Safety Notification it is particularly important to ensure that any claims, or circumstances that may lead to a claim, are notified in a timely manner, and no later than expiry, as there will be no cover for historic work after renewal.  We recommend you review your claims notifications obligations here .

• When changing insurers a standard exclusion applies in relation to any circumstances which may give rise to a claim which were either notified under an earlier policy of insurance, or which you were aware of, or ought to have been aware of prior to inception. Equally, no cover is available for any claims which were made against you prior to the period of insurance incepting.

As with the Fire Safety Notification provisions above, it is important that if you are aware of any claims or circumstances that might lead to a claim these are reported to your insurers prior to expiry of the current policy.  Again, we recommend you review your claims notification obligations here if you have not done so.

• The standard business description in the policy wording will be amended to a freeform description which will appear on the policy schedule. It is therefore important that when completing the proposal form you provide a full description of your professional activities.

• An exclusion will apply in respect of completion of EWS1 forms. If you have been involved in completing EWS1 forms please ensure this is highlighted prior to renewal.

• The Griffiths & Armour Approved Inspector Public Liability policy wording provided a small amount of automatic cover for Professional Indemnity run-off liabilities related to Approved Inspector services, in line with the requirements under the Government’s insurance criteria. Now that these criteria no longer apply, the automatic run-off cover will no longer be available. If a firm ceases to trade during the period of insurance, they will need to purchase an appropriate annually renewable run-off policy. Where such cover is required, we will use reasonable endeavours to work with insurers to make such cover available.