The Government introduced the Building Safety Act 2022 in response to the Grenfell Tower fire. This legislation is intended to improve building safety standards, with a particular focus on high rise buildings.
In this post we’ll discuss these new high rise building regulations, and explore their impact on insurance.
If you’ve any questions or concerns about your business insurance needs, we have a team of experts on hand to assist. They can also help you to understand the risks that you may face as a business. Contact us on 020 8290 9080 or email business@anthonyjones.com.
The Building Safety Act High-Rise Building Classifications
The Building Safety Act classifies high-rise buildings as higher-risk buildings. A higher-risk building is defined as having at least:
- Seven storeys (or it’s at least 18 metres high)
- Two residential units
Buildings that meet this criteria must be registered with the Building Safety Regulator (BSR) before people can occupy it. On top of this, the act defines that such buildings have “accountable persons”, who have certain legal duties when it comes to managing these buildings.
This legislation extends to hospitals and care homes, but hotels and prisons are exempt.
What Are Accountable Persons and Principal Accountable Persons in the Building Safety Act?
An accountable person is the individual or organisation that either owns the building outright, or who has a legal obligation to repair or maintain common parts of the building.
This could include:
- Landlords
- Freeholders or estate owners
- Building management companies – including resident management companies and right-to-manage companies
- Commonhold associations
The accountable person will have a legal duty to maintain:
- Corridors
- Lobbies
- Staircases
- The building’s structure and exterior
In addition, the law requires for each building to have a single, clearly identifiable accountable person, who will act as the first point of contact during disputes and other communications. This is known as a principal accountable person, and in most cases, it will be an organisation such as a local authority, or a social housing provider.
Accountable Persons’ Legal Duties for High-Rise Buildings
The building’s accountable persons and principle accountable person have a legal duty to assess and manage the possible risks of fire and structural failure in the parts of the building for which they are responsible.
They have a legal responsibility to:
- Report safety concerns to the BSR
- Keep the building’s occupiers informed and involved in building safety decisions (known as the resident engagement strategy)
- Keep secure digital records of key information about the building (known as “the golden thread”)
- Provide this building information to any relevant individuals and organisations
In addition, the principal accountable person has a legal responsibility to ensure that all structural and fire safety risks are properly managed throughout the whole building. This extends to identifying and assessing all possible fire and structural risks, taking steps to prevent incidents from occurring, and putting measures in place to reduce the severity of any impact.
You can read a full guide to an accountable person’s or a principal accountable person’s legal responsibilities.
What Are The Insurance Implications of These New High Rise Building Regulations?
The insurance sector has noted a number of consequences as a result of these new high rise building regulations:
- Longer timelines and higher claims cost. If a claim involves a higher-risk building, there will usually be extensive regulatory approval before any repair work can take place. This can lengthen the claims process, and even lead to higher claims costs, as insurers may have to provide alternative accommodation for longer periods.
- Resurfacing historic claims. As part of these new regulations, the Defective Premises Act limitation period has extended to 30 years. This expanded liability means that insurers may have to process claims for incidents that occurred decades ago.
- Stricter public authority requirements. Public authorities may mandate costly upgrades to a building’s structural or fire safety systems, including sprinkler systems, additional staircases, and so forth. This could further increase the length and the cost of claims, along with the cost of cover.
Will These New High-Rise Building Regulations Affect Your Business?
As we’ve seen, these new high rise building regulations principally apply to residential buildings. However, it’s common for businesses to operate out of residential buildings. High rise buildings may have shops or restaurants on their ground floors. It’s also possible for high rise buildings to have offices and other workplaces on some floors, with flats and other residential accommodation on other floors.
Mark Stevenson from Anthony Jones says:
“If your business is located in a ‘higher-risk’ building, then as a result of these new regulations, you might expect to pay a higher cost for your buildings insurance cover. And you might also expect for any claims you make on your insurance to take longer to process.
“As a result, it’s essential that you review your business interruption insurance. Your business may be out of action for much longer than you expect. So take a look at your business interruption sum insured, and make sure that your maximum indemnity period will give you all the time you need to recover.”
If you’ve any questions or concerns about your business insurance needs, we have a team of experts on hand to assist. They can also help you to understand the risks that you may face as a business. Contact us on 020 8290 9080 or email business@anthonyjones.com.
