I am increasingly concerned about the crisis in the building industry surrounding ‘claddings’, and now another façade fire! What is happening? I am worried I may have specified Alucobond in some projects a few years ago! Will I be able to get PI Insurance as per usual and more importantly, will I be covered if something happens?
Yours, very worried
It is true, especially with more incidents such as the recent façade fire at Neo200 that all Architects’ Professional Indemnity Insurances (PII) are now reacting to this issue by putting exclusions for cover for the use of such materials into their policies. This means, as you may guess that if the Architect specifies the excluded materials, they will not be covered for any claims relating to issues with such materials by their PII policy.
Be aware, that at the moment, the current ArchiTeam policy has no ACP cladding exclusion in place. It is, however, mooted to become unavoidable by our coming renewal in May this year, in one form or another.
Our helpful broker forwarded the following definitions of ACP to me:
“ACP are aluminium composite panels with a polyethylene core used for the purpose of external cladding (this does not include ACPs used as an “attachment” as defined by the Building Code of Australia).
Such aluminium composite panels include, but are not limited to, panels supplied by the following companies:
The PI Insurers may either make a more specific exclusion such as the above definition, or they may, which will be more difficult to monitor in practice, give a more generic exclusion in the form of a “Non- Compliant or Non-Conforming Building Products Exclusion” which addresses the use of a Non-compliant or Non-conforming buildingproduct, or the approval, the use or installation of a building product in a manner which is Non-compliant or Non-conforming.”
Our broker explains: “For the purposes of this exclusion: “Non-compliant” means any building product which does not comply with any applicable law or regulatory obligation, including but not limited to: the Building Code of Australia, the National Construction Code of Australia, any relevant Australian Standards, approved conditions, use or application, or the guidelines, practice notes or the like of any relevant building authority or other regulatory body.
“Non-conforming” means any building product which purports to meet specific requirements, and does not. For instance, is not fit for purpose, is not of acceptable quality, is counterfeit, or contains false or misleading claims about its qualities / properties.”
To help members navigate this complex and important topic, ArchiTeam is bringing back annual compulsory PII seminars that will serve as an opportunity for members to update their knowledge about the current policy, ask questions and hear about typical insurance scenarios. These will be held just after our renewal period, with the date to be announced soon.
In the interim, be sure to notify the insurer now to ensure you are covered for past projects, if you may have specified the above-mentioned or similar products in the recent past. This will ensure you have done your duty of disclosure before any exclusions will be put into place and you will be covered for those projects.
As always, the onus is on you, the architect to do your due diligence by your insurance contract and notify your insurer of any circumstance from which a claim may arise, in your case, dear A.R., you past specification of ACPs.
With respect to the shape and form of the ACP exclusion in our 2019-20 ArchiTeam members insurance policy 2019 you will need to sit tight and keep watching this space.
Disclaimer – ‘What could possibly go wrong?’ is not an advice column, it is only general comment from ArchiTeam who are not aware of your circumstances with any issue that you may have. You cannot rely on these general comments, each member must make their own decisions about any action they should take and seek independent advice of their own if they are unsure.