A reported delay to the Government’s proposed Cladding Remediation Bill is expected to prolong uncertainty across the construction professional indemnity insurance market, reinforcing conservative underwriting and limiting near-term relief in the market.

Over the weekend, it was reported that Angela Rayner’s proposed legislation to compel landlords to fix unsafe cladding has been delayed by the Government. The bill had been expected to bring greater clarity around future statutory duties on developers.

Commenting on the impact of the delay, Pete Newson, head of PI underwriting at Euna, said: “Reports of a delay to the Government’s proposed Cladding Remediation Bill signal the prolonging of uncertainty around future statutory duties on developers and property owners. This is unlikely to provide any near-term relief to the professional indemnity market."

Legislative clarity is fundamental to insurers’ ability to price risk and deploy capacity effectively. “This lack of legislative clarity impacts the professional indemnity insurance market, as pricing and capacity decisions are fundamentally underpinned by well-defined liability frameworks,” he added.

Newson says this latest in a string of UK building safety-related setbacks will likely only entrench existing underwriting caution. Ultimately, the delay reinforces insurers’ conservative underwriting stance, sustaining higher premiums, restrictive terms, and limited appetite for cladding and fire-safety-related risks across architects, engineers, surveyors and construction firms.

He also highlighted the challenge insurers face in assessing long-term exposure. “Professional indemnity insurers rely on certainty as to where long-term responsibility ultimately rests – whether with developers, building owners or other statutory duty holders,” Newson said, warning that continued ambiguity makes it harder to model worst case loss scenarios.

The cautious approach comes against a backdrop of sustained pressure on the PI market following recent building safety reforms, which extended limitation periods and expanded potential exposures for design and construction professionals. The availability of retrospective cover for historic cladding risks remains materially constrained, and the delay to the Remediation Bill is unlikely to ease that position.

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