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Insurers make decisions about the terms on which they will offer cover following an assessment of the relevant risks. This is usually informed by the insurer’s claims experience and other industry-wide statistics. The capabilities of insurers to assess risk is a key element on which they compete. This competition is important and should lead to better products and lower prices for consumers.
However, the Government is aware of the concerns of those people in affected buildings. The Government has taken a number of steps that will have an impact on insurers’ risk assessments.
Firstly, the Government announced that it would take steps to reform the building safety system, and will review the progress of removing unsafe ACM cladding from affected buildings. In addition, the Government has implemented measures such as providing £1 billion in 2020-21 to support the remediation of unsafe non-ACM cladding materials on high-rise buildings.
More specifically on insurance, the Government announced that it will commission a review with the insurance industry to consider how Professional Indemnity Insurance can be provided to fire engineers and other construction professionals to ensure they have the confidence to advise on the fire risks associated with ACM cladding.