The government has launched a professional indemnity insurance (PII) scheme to help EWS1 assessors carry out their assessments of high-rise buildings.
PII scheme
Launched on 26 September 2022, the government has created a new scheme that will enable qualified professionals to get the cover they need to conduct a fire risk appraisal on external wall systems (known as an EWS1 form) of mid- and high-rise buildings.
Developed by the Department of Levelling Up, Housing, and Communities (DLUHC), the scheme has been supported by the government’s Actuary Department (GAD). As part of the state-backed initiative, the government has entered into commercial arrangements with insurance companies SCOR UK Company Limited and MGAM Limited to offer policies to qualified professionals.
Addressing the lack of assessments
The purpose was to support the valuation process for high-rise “properties clad with potentially combustible materials”
The initiative aims to address the severe lack of fire professionals who undertake EWS1 assessments and release leaseholders from the lengthy wait to obtain EWS1 certificates when attempting to buy and sell properties.
These forms were introduced in 2019 as a “cross-industry initiative” by the Royal Institution of Chartered Surveyors (RICS), UK Finance, and the Building Societies Association. Their purpose was to support the valuation process for high-rise “properties clad with potentially combustible materials”, but they have caused considerable challenges for many in the industry, including a shortage in the number of qualified professionals able to check the safety of walls that have been clad.
fire safety checks
This was further intensified by a decrease in the number of insurance companies willing to provide PII cover to those assessors undertaking fire safety checks.
DLUHC minister Paul Scully said, “For far too long leaseholders in high-rise buildings have been stuck in limbo, unable to secure mortgages on their properties, sell up, and move on to their next step."
professional judgment
The initiative was first announced in 2021 to address the backlog awaiting EWS1 assessments
“It is for these leaseholders that we have launched this new indemnity scheme today, and I thank our partners for helping make this a reality. This scheme will give EWS1 assessors the confidence to exercise their professional judgment, speed up the sale of flats, and allow lenders to lend with confidence.”
The initiative was first announced in 2021 by the then building safety minister, Lord Stephen Greenhalgh, to address the backlog of leaseholders awaiting EWS1 assessments.
Availing insurance claims
GAD has estimated that it will cost the department approximately £100 million in expected losses. At the time, former Housing Minister, Stuart Andrew MP, explained, “The cost of the scheme, including the expected losses, will be offset in full through premiums: EWS1 assessors will be required to purchase PII policies for any EWS1 assessments they complete, with the funds gathered being accumulated and subsequently used to pay out any insurance claims successfully made against the assessors."
"In this way, the scheme will operate as fiscally neutral for Government.” The scheme is expected to run for five years, following which insurance companies will take over and, thus, remove the need for a state-backed initiative.
