Dame Judith Hackitt’s report, Building a Safer Future, was commissioned following the failures of building safety that led to the Grenfell Tower fire. It sparked the need for improved building regulations across the UK and brought about the biggest legal change since the Architects Act 1997 and Building Act 1984.
The Building Safety Act 2022 (BSA) became a formal law on 28th April 2022, stating that: “This Act makes ground-breaking reforms to give residents and homeowners more rights, powers, and protections – so homes across the country are safer.”
Introduced for “greater accountability and responsibility to building safety” (BSA), the Act created three new bodies to oversee the implementation of the new building regulations: the Building Safety Regulator, the National Regulator of Construction Products and the New Homes Ombudsman.
Further BSA updates to strengthen building safety measures in the UK come into effect from 1st October 2023, meaning changes to the way in which higher-risk buildings are designed, constructed, maintained and managed.
What does it mean for the construction industry, developers & homeowners?
The BSA means changes to the way in which higher-risk buildings are designed, constructed, maintained and managed. Within the Act, this is classified as a building at least 18m in height above ground (excluding rooftop plant), or at least 7 storeys above ground (including mezzanines), and at least two residential units, or is a care home or hospital.
Builders & Developers
Whilst the Act mainly focuses on higher-risk buildings, it is applicable to all building work. This means that all duty holders must comply with the BSA and Building Regulations:
- The developer/client must make suitable arrangements for the planning, management and monitoring of a project.
- The principal contractor and designer must comply with the competence requirements set by the British Standards Institution (BSI).
- Building owners and managers are accountable for the safety of buildings, including fire risk assessments and providing digital floor plans for fire departments.
- The failure to comply with the regulations put in place will result in fines and/or imprisonment.
Dame Judith Hackitt’s report identified the need to support duty holders in understanding a building and the key measurements needed to keep it, and its residents, safe. Titled the ‘golden thread’, guidance is offered to anyone responsible for compliance with the BSA and Building Regulations, highlighting the importance of documenting and keeping clear records for works undertaken. You can find more information about this here: https://bit.ly/HSE-Guidance.
The introduction of the New Homes Ombudsman Scheme means that homebuyers can voice their complaints to a New Homes Ombudsman if the new home they’ve purchased isn’t up to scratch. It has also led to the mandatory measure for developers to provide the purchasers of a new home with a warranty, giving homeowners that extra peace of mind.
Manage all of your business protection under one roof – request a quote today or contact us on 01353 652760.
How will it impact on insurance measures?
We expect this new legislation to have an impact on construction insurance policies, including Professional Indemnity and New Homes.
Professional Indemnity Insurance is a commercial policy designed to protect you against claims for injury, damage, negligence, financial loss, providing incorrect information and more. The introduction of the BSA means that you could be at more risk to claims from clients and other third parties without a Professional Indemnity policy. A list of expected changes are as follows:
- Higher claims are expected due to greater regulatory and stakeholder scrutiny, as well as changes to limitation periods under the Defective Premises Act.
- The type of work that is subject to the duty under the Defective Premises Act has been significantly expanded.
- The list of responsible persons is much greater.
- Existing closed matters may now be reopened.
You can find out more about Professional Indemnity Insurance and how you to protect your business here.
A New Homes Warranty covers a build for any structural issues that are identified within a specific time frame following completion, pollution affecting the property and more. With a typical 10-year warranty period, the introduction of the BSA means that we’re expecting it to increase to 15 years.
And here are some other changes we expect to see in accordance with the new Act:
- A premium increase – we’ve already seen prices double in the residential market over the last 5 years (approximately).
- There will be a penalty introduced for not taking this insurance policy out – £10,000 or 10% of the sale value of the building.
- Rather than just being required for new builds, this will be needed for any creation of a new dwelling e.g., conversions.
How we’re reacting to the changes
Here at FMB Insurance, we’re keeping an eye out for responses from insurers, reinsurers and consumer codes, and liaising within the market to understand the impact of the Building Safety Act 2022. We recommend that all builders and developers familiarise themselves with the particulars of the Act and understand the accountability of everyone involved in projects.
To find out more about the Building Safety Act 2022 or discuss your next project, get in touch with us on 01353 652760 or request a quote today.