Jurisdiction(s):
United Kingdom

Approved Inspectors’ Insurance After Grenfell: Withdrawal of Government Schemes, Open-market Professional Indemnity, Reduced Run-off and Gaps in Homeowner Redress in England and Wales

Published on: 19 August 2022

Published by a Law360 reporter

Legal News

Article summary

Under section 47(6) of The Building Act 1984, approved inspectors were previously obliged to hold specified minimum insurance, with mandatory run-off cover arranged under a scheme approved by the secretary of state; they are now permitted instead to obtain revised levels of professional indemnity insurance on the open market. The reform was introduced to prevent an insurance crisis after the Grenfell Tower tragedy, which had caused many approved inspectors to cease trading and led insurers to stop writing the risk. Since private certification of buildings was introduced in England and Wales in 1984, approved inspectors have consistently struggled to secure adequate insurance. As private building control inspectors lack the financial strength of local authorities, which are permanent statutory bodies, a fundamental feature of the private certification regime was to require private inspectors to carry sufficient cover, ensuring house purchasers had meaningful redress if an approved inspector performed statutory duties negligently. Before the 2017 Grenfell disaster, the government required the following minimum levels of cover for approved inspectors:

a minimum limit of £5m for claims against approved inspectors in respect of personal injury, including illness, disease, and death
a minimum of £1m

as required by government before 2017 for approved inspectors...

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