Buildings Insurance – the next flare up following Adam Kiziak’s expulsion?

The ongoing impact of Adam Kiziak’s suspension, and now expulsion, from the Institute of Fire Engineers (IFE) continues to have serious repercussions throughout the sector. The IFE’s findings, that he lacked competence, accuracy and vigour, led to an immediate response from mortgage lenders, with a broadening approach amongst lenders of refusing to lend against properties supported by EWS1 Forms authored by Mr Kiziak, and more generally his company, Tri Fire. 

The Government soon followed, removing Tri Fire from its panel of firms approved to conduct fire risk appraisals of external walls (FRAEWs) for applicants to its cladding remediation fund for medium-rise buildings, the Cladding Safety Scheme (CSS), with existing applications subject to “additional checks”, i.e. an independent review.

Valuers are following suit, raising concerns over what value, if any, to ascribe to those properties used to support institutional lending.

The next area to feel the impact will be buildings insurance. All EWS1 Forms, and any other documents that assess risk, authored by Mr Kiziak and/or Tri Fire are now the subject of some uncertainty (unless independently verified). That is certainly the case where either no works were deemed necessary (A or B1 EWS ratings), or where a particular scope of works was recommended and implemented. The risk attached to these assessments will almost certainly affect an insurer’s decision whether to insure the building or on what terms.  As such, reliance on a Tri Fire document is material and goes to the insured’s duty to give a fair presentation of the risk.

In terms of its immediate impact, for existing policies there may be an express contractual obligation to notify the insurer of any “change in risk” – building owners should carefully review their policy terms.

Going forward, the fact that a building is supported by a document authored by Mr Kiziak and/or Tri Fire will almost certainly be a material matter to disclose on renewal (and your broker should advise you of this), and it will be advantageous to understand the insurer’s position as soon as possible. 

In all likelihood, if not a step already taken, the insurer will require a new assessment to be carried out for any affected property. If not, there will be the real risk (if not likelihood) that adverse cover terms might then be imposed, such as very significantly increased premium and excesses, reduced limits on cover. It might even be the case that insurers will not be prepared to confirm ongoing cover at all unless and until satisfied at the protections that are in place to protect the building asset they are being asked to insure. 

This all feeds into an already overwhelming demand for resources and reassessments by competent assessors, and some form of prioritising must take place as well as reserving for those further investigative and also insurance costs going forward.

If you require any assistance with navigating these difficult issues, please contact us (Michael Wharfe, 020 7880 4359 or Stephen Netherway, 020 7880 4328).