Archive for category: General News

Rising professional indemnity insurance premiums and restrictions on cover are preventing construction companies from taking on projects, and could delay work to improve the safety of buildings post-Grenfell, an industry survey has revealed.

The issue is creating a “two-tier system” where only those firms prepared to procure appropriate PI cover can undertake higher-risk projects.

The Construction Leadership Council survey results indicate that PI insurance premiums increased almost four-fold at the last renewal, having doubled the year before. Meanwhile, a quarter of respondents reported losing work due to inadequate PI cover. A similar proportion have changed the nature of their work due to strict conditions and limitations placed on them by insurance firms.

Even though high rise residential work makes up less than 5% of the work of two-thirds of firms surveyed, almost one in three could not buy the cover they needed in the wake of the Grenfell Tower fire. In addition, over 60% of survey respondents have some form of restriction on cover relating to cladding or fire safety, while one in three have a total exclusion in place for cladding claims and one in five for fire claims.

The survey results back up issues we are now seeing in practice due to a hardening of the professional indemnity market. The impact of this shift is likely to be disproportionately felt by SMEs, which are less able to shoulder the burden of increased premiums and are often reliant on the ability to accept a variety of work. We are starting to see, in effect, a two-tier system, where only those able and prepared to procure appropriate PI cover can take on work on higher risk projects. The forces of supply and demand then give those contractors and consultants a stronger bargaining position in commercial negotiations.

An interesting point I noted from the survey is that one-third of respondents report that they could not do remedial work to external cladding systems even if they wanted to, due to insurance constraints. This will undoubtedly impact the pace at which remediation can happen, lead to increased costs, and could make out of court settlements on liability more difficult to achieve.

A majority of respondents to the CLC survey said they buy cover for £10M or less, with very few buying over £30M. Almost half said they had been declined insurance by three insurers or more, while two-thirdscarry a claim excess imposed upon them by their insurers.

Difficulties in obtaining PI cover have implications for projects completed during previous insurance periods as well as current schemes because PI insurance operates on a “claims made” basis.

Contractors and consultants are typically obliged to maintain insurance cover at the same level in placewhen they delivered the work. This must be the case for the duration of the limitation period in which claims can be brought. Any failure to do that could be a breach of contract and could mean that a future claim is not backed by adequate insurance. The excess liabilityrequired in these instances might well push smaller contractors or consultants to the wall.

We are already seeing how difficulties arising from PI coverage limitations stifle the construction sector’s ability to react nimbly to new needs and opportunities, which could have a detrimental impact on the Government’s Build Back Better aspirations.

Commenting on the survey findings, the CLC’s PI insurance group chair Samantha Peat of Wren Managers, said she was extremely worried by the extent of the industry’s PI insurance problems and pledged to work with the government and industry to identify solutions:

“The cost increases, exclusions and claim excesses that companies are having to bear – even those that do not even work in high rise residential – could make it unsustainable for them to stay in business,” she warned.

“The survey results suggest firms will not be able to afford premiums and claim excesses, and they face the choice of refusing some work or undertaking projects for clients with inadequate insurance cover.”

There are no obvious solutions, but – given that the dynamics of the PI market are driven by insurers’ appetites for risk – there might be value in encouraging a more nuanced assessment of the business models of insured consultants and contractors, particularly the two thirds for whom less than five per cent of work is high risk. If the current constraints persist, that might lead to more fundamental changes in the way work is allocated, including, for instance, by renewed emphasis on alternative models, such as the integrated project insurance route.

Source: Business Matters

Construction output fell unexpectedly by 2.0 per cent in April – although the ONS said this followed a hefty 5.8 per cent jump in March.

Britain’s recovery from the Covid-19 pandemic sped up in April as lockdown measures eased, with the fastest monthly growth since July leaving output a record 27.6 per cent higher than a year earlier, when the virus was rampant and lockdown tightest.

It comes, however, after output had plunged by almost 10 per cent, the biggest drop in more than 300 years. Exports and construction are still in a slump.

The figures on Friday from the Office for National Statistics (ONS) showed rapid growth in the services sector as non-essential retail and hospitality businesses opened their doors after months of closure and schools fully restarted.

Economic output rose by 2.3 per cent month-on-month in April, marking the fastest growth since July, the ONS said, and slightly above the Reuters poll consensus for a 2.2 per cent increase.

“The jump in GDP in April was another sign that consumers are raring to spend as the economy reopens,” said Thomas Pugh, UK economist at consultancy Capital Economics.

However, British economic output remained 3.7 per cent below its level in February 2020, before the pandemic led to lockdown measures, the ONS said.

Although Prime Minister Boris Johnson wanted to fully lift lockdown restrictions in England on June 21, helped by a swift roll-out of Covid-19 vaccines that has brightened Britain’s economic outlook, the Delta variant of Covid-19 first detected in India is spreading fast, and likely to result in an announcement later to day that the restrictions will be extended, possibly for a further 4 weeks.

April’s growth came despite an unexpected 1.3 per cent drop in industrial output, reflecting widespread maintenance of oil rigs and a shortage of computer chips for car manufacturers.

Output in the services sector jumped by 3.4 per cent in monthly terms in April – above all forecasts in the Reuters poll that pointed to growth of 2.8 per cent.

Schools reopening added 0.7 percentage points to GDP growth in April, while the retail and wholesale sector added 0.9 percentage points, the ONS said.

Construction output fell unexpectedly by 2.0 per cent in April – although the ONS said this followed a hefty 5.8 per cent jump in March.

“Today’s figures are a promising sign that our economy is beginning to recover,” finance minister Rishi Sunak said.

Last month the Bank of England raised its forecast for British economic growth in 2021 to 7.25 per cent from February’s estimate of 5.0 per cent.

That would be the fastest annual growth since 1941 when Britain was rearming during World War Two. But it comes after output plunged by almost 10 per cent, the biggest drop in more than 300 years.

Trade with the EU continues to be hurt by friction from new post-Brexit trade restrictions, though by less than at the start of the year.

Compared with three years ago – the last time trade was unaffected by either Covid or fears of an imminent disruptive Brexit – British goods exports to the EU this April were 7.1 per cent lower and imports from the EU were 15.3 per cent lower.

Exports to the EU were also below their average for 2019.

“That is a disappointing performance, given the boom in global trade flows; UK exporters have lost market share,” Samuel Tombs of Pantheon Macroeconomics said.

Source: Cyprus Mail

Tom Roche, Secretary, Business Sprinkler Alliance

In a post-Covid world, governments are being urged by the UN Environment Programme (UNEP) to implement deep building renovation and performance standards for newly constructed buildings into pandemic recovery packages.  While reducing energy demand and carbon emissions through the use of natural construction materials, greater insulation and renewables will be the way forward, the aspect of fire resilience is often overlooked. It should not be. Losing the materials and building usability in a fire will result in valuable resources taken to rebuild them. A holistic approach that addresses sustainability and fire resilience will be needed to deliver these outcomes with active fire protection playing a key role in this resilience.

According to the UN Environment Programme (UNEP) report when adding emissions from the building construction industry on top of operational emissions, the built environment sector accounted for 38 per cent of total global energy-related CO2 emissions. Pre-pandemic building emissions from the built environment in 2019 were noted to reach their highest level.

Action is needed if we are to meet the aspiration of net zero carbon by 2050. The drive to preserve resources will mean a building will no longer follow the traditional linear model of ‘take, make, dispose’, but would be circular and built with reused materials and/or more organic (bio) materials. Buildings will also be able to be taken apart and deconstructed. Furthermore, a building will need to be flexible and adaptable to the short term whilst being built for the long term when considering its internal use. They will also need to be smart and connected, using sensors to determine efficiency operations and user experience.

We will need to consider a building more as a system and an asset where the value is in its efficiency, flexibility and re-usability. Protecting that reusability will therefore become key to a building’s sustained value. Losing the materials and the building usability in a fire will see it taken out of the cycle – the result will be a valuable resource taken to rebuild them and increasing lifecycle costs as was noted by a study by FM Global. Therefore, a holistic approach that addresses sustainability and fire resilience will be needed to deliver these outcomes. This will mean a shift in regulatory thinking too.

The pursuit of green

For many years now the construction industry has started this journey pursuing sustainable and green construction. This has been supported by government regulations, incentives, certification schemes and the credits within them.

One of the most obvious items across Europe is the drive to use more natural products. For example, the use of timber is considered to be more sustainable for certain buildings than other traditional methods of construction. However, we also know these materials burn. High profile fire events have raised questions around the detailing and resilience of buildings where natural products are used as a structural material. There is a clear need for research in this area but also thinking in terms of what this means for long term sustainability.

Fires in new buildings with high-level ratings in green certification schemes have occurred. Some have been completely destroyed by fire, meaning their potential saving and green credentials are gone. Valuable resources are needed to recreate them, and their function has been interrupted for several months, if not years. Some see this as a signal that fire safety regulations deliver the wrong outcome for sustainability and others that there is a blind spot in certification schemes.

This is neatly illustrated by the Carbon Neutral laboratory in Nottingham, UK which was constructed using mass timber but destroyed shortly before it was completed in 2014. When it was rebuilt following the fire it was in line with regulations; it followed the original design and there was no increase in fire resilience – no active fire protection. The rebuild was showered with shortlisting for awards relating to its green credentials. Somehow the resources lost in the original fire did not matter or count. The original fire was consigned to history and had no bearing on the claims for the efficiency and carbon neutral credentials.

Active fire protection does not feature in this discussion. Instead, it is assigned to mirroring the state fire regulations in differing countries where the focus is on safety and limiting conflagration. A recent update on a study from 2015 by the Fire Protection Research Foundation summarises this by looking at the challenges that need further research.

Active fire protection

Active protection systems such as sprinklers are part of the building system and add to their overall carbon emissions. However, before dismissing active fire protection because of these emissions their benefits need to be weighed. Studies show their benefits in minimising the impact of fire and emissions.

A future view of the world wherein protecting the hard-won resources so that they can be used and reused leads to a path where minimising fire incidents will be important. Active protection systems will increasingly make sense for this reason. They will also make sense when thinking of the desire for buildings that can be flexible in use throughout their life. The whole life cost of a building and its value will be tied to both these concepts.

That said active fire protection systems will need to continue to adapt to demonstrate their improving whole life costs and sustainability credentials too. This will require adapting test regimes, increased recycling of water and perhaps new technology to improve their already high effectiveness.

In a world where sustainability is key, a disposable building will no longer be the ‘right thinking’. I would contend that a sprinklered one will be.

For more information visit www.business-sprinkler-alliance.org

The Building Engineering Services Association (BESA) is supporting a campaign led by an international group of scientists and engineers to have current building ventilation regulations completely rewritten.

The 40-strong group of leading experts and academics condemned the current state of indoor air quality (IAQ) as a scandal comparable to the contaminated water supplies in 19th Century Britain that led to thousands of deaths.

In an article for the journal Science, the group lamented the UK’s lack of air hygiene regulations, which is in stark contrast with the strict public health controls imposed on food, sanitation and drinking water. They blamed the way buildings are designed, operated, and maintained for helping to spread disease, including Covid-19, and called for a “paradigm shift” in ventilation similar to the changes brought about almost 200 years ago in water sanitation.

An air quality certification system for public buildings, like the one used by the food industry, should be introduced, the group argued. They estimated that installing ventilation and filtration systems able to remove airborne pathogens would add just 1% to the construction costs of a typical building. This compares with the current global spend of at least $1 trillion a month on Covid-19 mitigation measures.

The Science paper’s lead author Professor Lidia Morawska from Queensland University of Technology in Australia, said: “For decades, the focus of architects and building engineers was on thermal comfort, odour control, perceived air quality, initial investment cost, energy use, and other performance issues, while infection control was neglected.”

Pathogens

Cath Noakes, Professor of Environmental Engineering for Buildings at the University of Leeds, and a member of the government’s SAGE advisory group added that improving ventilation to reduce exposure to airborne pathogens would bring other benefits beyond transmission control, including improved productivity and wellbeing.

“Over the years, we have neglected the role that the air circulating inside a building plays in the way germs and viruses may spread between people. The pandemic has exposed that deficiency in our understanding and the way we seek to make buildings safer to use,” she said.

BESA said the pandemic had created a “window of opportunity” to properly address all aspects of IAQ for the first time. It welcomed the intervention of the expert group and urged the UK government to put its weight behind a series of initiatives including a proposed new British Standard and revisions to building regulations.

“The pandemic has pointed the spotlight at ventilation, and we must not miss this opportunity to address, once and for all, the long-term problems caused by poor IAQ in thousands of buildings up and down the country,” said BESA’s head of technical Graeme Fox.

He welcomed the news that the British Standards Institute (BSI) had decided to fast track the creation of BS 40101 for Building Performance Evaluation saying this would give added weight to IAQ measures proposed by the Association and other parties advising the BSI.

“The new Standard and the current review of Part F of the Building Regulations are big platforms we can use to enshrine high standards of ventilation and air filtration. However, it is crucial that we set ambitious targets to control the full range of airborne contaminants that affect health and wellbeing,” said Fox.

“We must also make sure we are in line with the latest worldwide thinking including updated World Health Organisation (WHO) guidance because whatever standards we agree now will be applied for many years to come,” added Fox.

The WHO has announced that it will be updating its air quality guidance at the end of June and the European Union is also expected to set tougher targets shortly. BESA added that any measures proposed should be relevant to conditions inside buildings.

“The government’s primary focus tends to be on outdoor pollution, but IAQ is a very different challenge and can often be many times worse than the conditions outside the building,” explained Fox.

“Our members repeatedly encounter the serious problems caused by poor IAQ and have good practical experience of what it takes to fix it. We have a duty to turn buildings into ‘safe havens’ that use good engineering methods to protect people from all airborne contaminants so they can enjoy better health and wellbeing.”

www.theBESA.com/iaq