Fire Safety Reinsurance Facility (McGill and Partners)

As part of the ongoing insurance reforms for Multi-Occupancy Buildings Insurance and following the Association of British Insurers’ (ABI) press release (Fire Safety Reinsurance Facility finalised | ABI), you’ll be aware that a Fire Safety Reinsurance Facility (the Facility) has been established by (re)insurance broker McGill and Partners. This has been set up with support from the ABI and the British Insurance Brokers Association (BIBA) and is focused on those buildings that need remediation to achieve suitable safety standards.

For its part, the insurance industry has been working hard to find solutions. The facility is a key part of that approach and it should help some affected residential leaseholders in the medium term. However, UK-wide building safety is a long-term topic for which insurance is only part of the solution.

We’re fully supportive of the Facility and of any additional measures that help people feel more secure in their homes.

What is our position?

LMB Insurance Services Ltd  does not look to write, in isolation, Multi-Occupancy Buildings that are fire-safety compromised (e.g. through cladding or other similar issues). We will continue to write risks and support customers within portfolios where there is a plan in place to secure funding and a clear intention for remediation to Property Safety standards within a reasonable timeframe.

We will not compete on new business where the risk is currently with an Insurer that has access to the Facility.

Acceptance criteria

The Facility operates within certain criteria.

For properties to be considered in scope, a set of criteria needs to be met:

• Risks that are residential use only and/or are no more than 50% commercial in occupancy
• Risks with a declared value less than GBP 150,000,000
• Cover for contingent business interruption is limited to GBP 150,000
• Risks that have any combustible cladding materials EN 13501 Cat B-F.

The Facility has not been designed to provide for:

• Any Liability covers e.g. Property Owners or Public Liability
• Machinery breakdown covers
• Credit or mortgage impairment insurance, financial guarantee and insolvency insurance
• Vacant risks – buildings where more than 50% of the residential flats forming any building become unoccupied for 45 consecutive days or more.
• Property in the course of construction except where specifically covered under a Contract Works/ Contract all Risks extension under the original Policy Wording. In such case, cover shall apply up to the amount or limit stated in the original Schedule, however not to exceed GBP2,000,000
• Faulty design/workmanship/latent defects
• Risks that have been written under Delegated Authority
• Risks with a policy period greater than 18 months
• Risks with fire safety defects and which do not have a remediation plan in place e.g. risks with fire safety issues that are eligible for Government financial support under The Cladding Safety Scheme that do not have a remediation plan in place.

How would cases be entered into the Facility?

At the next renewal of the policy for the building(s) in question, we’ll discuss with you, whether it meets the above acceptance criteria and the consequent placement to the Facility on an individual basis.

Claims process

Our Claims handling will remain unchanged and customers won’t see any changes.

More information

For further support or queries, please contact us.