Housing crisis to deepen as fire experts face 'insurance crisis'

Housing crisis to deepen as fire experts face 'insurance crisis'

Engineers Ireland told the Oireachtas Finance Committee the insurance issue was deep-seated but had become worse following the 2017 Grenfell Tower fire that claimed 72 lives. File picture: Sam Boal/Rollingnews.ie 

The housing crisis is set to deepen because fire experts can’t get the proper insurance that will allow them to sign off on individual houses, flats, nursing homes, and entire housing estates, an Oireachtas committee has been told.

Engineers Ireland – the professional body that represents 25,000 building experts across the island – said the crisis has become worse in recent weeks as a handful of British insurers that dominate the market have either hiked premiums, excluded building work from their policies, or withdrawn offering personal indemnity insurance altogether.

Fire experts are key to the completion of almost every residential and commercial building but they won’t be able to approve fire detection systems, fire resistant materials, and electrical smoke controls without first securing personal indemnity insurance.

That in turn means everything from individual house refurbishments to whole housing estates cannot be certified and handed over as delivered.

John Power, a chartered engineer and vice-president of Engineers Ireland, told the Oireachtas Finance Committee the insurance issue was deep-seated but had become worse following the collapse of the UK property giant Carillion three years ago, and the 2017 Grenfell Tower fire that claimed 72 lives when its exterior cladding went ablaze.

'Housing problem will only get worse'

Mr Power said that without a solution “the housing problem will only get worse”. He described it as “a crisis” that will affect “housing, flats, nursing homes, and factories”.

The crisis over personal indemnity insurance is another part of the troubles facing customers of all types of insurance.

It comes after the roster of mostly British-based insurance firms also pulled out of public liability insurances in the Republic that hit creche owners, in particular. The ongoing row about the elevated costs of all types of insurances led to business groups successfully campaigning for the reduction in the payment of personal injury awards.

But the committee heard that engineers and fire certificate experts can’t sign off on almost any building project without the key insurance cover in place.

Housing estates will not be handed over

It may mean that newly built housing estates will not be handed over if fire experts cannot renew their personal cover during the project, Michael Lyons, chair of the fire and safety division at Engineers Ireland, told committee chair John McGuinness.

The crisis caused by the Grenfell fire led to the British government earlier this year setting up a €4bn fund, part of which is meant to help construction professionals to obtain insurance. File picture: Sam Boal/Rollingnews.ie 
The crisis caused by the Grenfell fire led to the British government earlier this year setting up a €4bn fund, part of which is meant to help construction professionals to obtain insurance. File picture: Sam Boal/Rollingnews.ie 

Fire engineers across the country face huge price hikes in their costs, the committee heard.

It was told of a Waterford fire engineer who in recent weeks was offered restricted insurance cover for work on a housing estate at a cost of €40,000 – a fourfold increase – which means  “a current project could be under threat” if the proper insurance cover is not secured.

Engineers Ireland said the provision of personal indemnity insurance poses a risk to the Government in delivering housing. The issue had been signalled up following the collapse of Carillion and the Grenfell fire, Mr Lyons said.

Grenfell fire crisis

The crisis caused by the Grenfell fire led to the British government earlier this year setting up a £3.5bn (€4bn) fund, part of which is meant to help construction professionals to obtain insurance.

Mr Lyons said in the last two months he has received numerous warnings about the availability of insurance, citing a colleague in Wicklow who has been told that housing will no longer be covered by the insurer. 

In Ireland, some insurance companies have stopped writing personal indemnity insurance altogether, the committee heard.

The committee heard of an instance where the insurance premium had risen to €65,000 from €2,500 in two years despite Ireland not having the same fire risk issues with residential tall buildings as Britain now faces following the Grenfell Tower tragedy.

Mr Lyons said in some cases the insurance renewals excluded cover for external walls, effectively meaning that engineers can’t do any fire safety work.

“Practically everyone” employed on a building site has some sort of role in fire protection, Mr Lyons said. Customers won’t be able to take delivery, and increased costs will inevitably be passed onto customers, the committee was told.

Small engineering practices are most vulnerable and the whole country faces the same crisis, Mr Lyons said.

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