IUA sets up construction group

buidling-site

Group formed amid ongoing issues with capacity in the construction market.

The International Underwriting Association (IUA) has started a London Market committee, The Construction Working Group, to address issues around the use of cladding and fire protection following the Grenfell fire.

It is for underwriters who offer professional indemnity cover to the construction sector.

Technical
The IUA further stated that it hopes to encourage a more technical underwriting approach and address the availability of professional indemnity cover throughout construction industry. And that the group will endeavour to promote engagement between insurers, the construction industry, government and regulators.

It has added that the group will meet monthly and liaise closely with the IUA’s existing Professional Indemnity Forum.

The group has been developed at a time when the construction and PI market is facing upheaval amid a reduction in capacity.

In April this year, results from a Mactavish report suggested that insurance companies are reluctant to underwrite the risks in some sectors as the market faces “unprecedented” tightening.

People
Michael Attwell, professional indemnity underwriter at Beazley is chair of the new group which has representatives from 16 companies across Lloyd’s.

He said: “The insurance industry has to change the way it works with contractors to achieve better pricing of risk and risk allocation. Insurers must adapt to changing standards particularly in cladding and fire protection post the Grenfell Tower disaster. 

He added: “Our goal is to build a more joined-up approach across the industry and to drive best practice going forward.

“The contractors’ professional liability market needs some fresh thinking – this is essential to ensure that the market is able to perform as a strong and stable partner through hard times as well as good.”

Construction
The construction industry has experienced high levels of hardening recently, as discussed in the September news analysis.

In late July the Society of Insurance Broking (SIB) at the Chartered Insurance Institute created a guide for brokers best practice on construction and the best coverage for their clients following the Grenfell Tower fire disaster.

In early July research published by HSB Engineering Insurance indicated that the majority of brokers are in the dark when it comes to developments in technology in the construction sector.

In early May an Insurance Age in-depth examining construction discussed how SME construction firms are moving towards sourcing insurance online and how, without guidance from brokers, they could be facing large claims that aren’t covered.

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