Building Safety Act – How to accept ongoing business whilst being protected

Many firms want to continue to take instructions involving Building Safety Act (BSA) work to maintain their income against a backdrop of concern over the risks involved and potential drop off in fees as we head into 2024.

Information on managing those risks is becoming easier to find and much of it common sense. However, several law firms we have heard of recently have said that their Insurers would not cover them for that particular type of work.

The key to ongoing protection for this type of work, and obtaining the best terms is to understand and adapt to the following:

• • During busy periods (1/10 and 1/4 renewal seasons) junior staff in many Insurers transfer your proposal form onto a computer rating system which says “yes/no/maybe” and quotes a premium if the risk is acceptable – if you don’t want your proposal to be declined at first base, you have to intervene in that process in some way.
  • Underwriters have a difficult task in deciphering what is and isn’t a good risk, because the targets imposed in many broker firms means that poor features are not always visible and material information might not find its way through to the underwriter – either deliberately or by ignorance. You must address specific key features and document them, and ensure that they go forward to the Insurer.
  • The underwriters career rests on the quality of their past record, and their ability to continue to work in the profession is based on how they perform. Having documented evidence of risk features that they can point to if anything goes wrong forms part of their career protection – it is a necessity to ensure that the law firm obtains cover, or cover at a commercially viable premium.

Insurers all differ in their attitude and approach and there is no single market wide solution to what information you will need to provide. However we do have a means of identifying and capturing the key BSA additional information that most Insurers will need in order to make a difference to insurability (whether you receive renewal terms if you are in the BSA space) or pricing (paying the right price for the risk and not prompting a knee jerk reaction).

Key to all of this is for law firms to have direct dialogue with their Insurer to enable them to vocalise how they manage the risks involved, to give the Insurer comfort and enable them to document these features and protect themselves. If your broker will not facilitate that process, they have something to hide.

Most Insurers will continue to cover BSA related transactions, provided that law firms can evidence and document their risk management features, and demonstrate that they are real, their staff are trained and understand how to manage them, and there are safety checks involved in the process.

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