PII Insurance increase under SI.9 with no cover for pyrite?
by Bregs Blog admin team
BRegs Blog admin 13th December 2014
Following the Minister’s warning to professionals on fees, he’s also sent a clear signal that those responsible for defective construction products will be pursued under the new building control regime… (Muscovite Mica). Minister Alan Kelly:
“the people who ensured young families would be left in this manner must be followed to the end“.
See Minister Kelly’s comments here.
All Certifiers should take note. We wonder how could an Assigned Certifier possibly know the chemical composition of blocks? Even the Pyrite Panel said this would be impossible. It would seem that all Professionals’ insurance policies exclude pyrite, and are set to increase due to increased liability under BC(A)R SI.9.
Correspondence from a Professional Insurance provider to a contributor in December 2014 illustrate the problem (extracts to follow):
Dear BReg Blog,
I asked a Professional Indemnity Insurance provider the following questions. I would suggest you get your readers to do likewise:
- Is there any discount or loading for new certifier duties under BC(A)R SI.9?
- I was wondering what standard levels of cover do you provide for sole traders, do you cover pyrite?
This is the reply I received:
I believe most of the insurers apply a pyrite exclusion, sample wording below for your review;
“The Underwriters shall not be liable to indemnify any Insured or to make any payment under this Policy in respect of any Claim, Loss, liability or Defence Costs arising out of, caused by, resulting from, in consequence of, in connection with or in any way involving any of the following:
22. PYRITE/CONTAMINATED INFILL
any presence or alleged presence of any products or material containing or alleged to contain any form of pyrite, iron sulphite or their derivatives or any contaminated infill material.”
In relation to the new assigned certifier role, I do not think any insurer is awarding discounts for the new role, if anything they are loading their rates for the additional responsibility/exposure taken on. Our main market is keeping their rates static which seems to compare favourably.
We wonder where this leaves consumers, given that Local Authorities still have not increased resources to police the construction materials sector. Certifiers are now responsible for certifying materials (Part D) but are not insured for pyrite in projects.
This may cause some uncomfortable questions by registered professionals, who have consistently been told by their representative bodies that Professional Insurance won’t increase. More worrying is if a certifier is found liable for signing off on pyrite and there is no insurance cover for the claim.
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