Approved inspectors

Recently a spokesperson for the Association of Consultant Approved Inspectors (ACAI) stated:

“Statutory regulations on professional indemnity and public liability insurance are currently excessively stringent, meaning many insurers are unwilling to provide cover for inspectors. This is creating a crisis point within the building control industry.

Urgent consideration is needed from the government to attempt to resolve the situation before large numbers of firms of all sizes are forced to cease trading. Failure to act will severely curtail the industry’s capability to sign off safe buildings.”

This situation arose out of the 2010 recession but has been exacerbated in the wake of the Grenfell Tower tragedy. Whilst it has been of crucial importance that lessons were learned from the disaster, the current situation with Approved Inspectors puts the entire industry is a difficult position. The situation concerning insurance of Approved Inspectors has significant repercussions on getting new buildings signed off. Indeed, some believe it is jeopardising safety too.

Before we explain the current ‘crisis’ and what you can do about it, let’s explain a little more about Approved Inspectors and why they matter to your complex construction project.

Developers and builders must comply with the Building Regulations. This applies to new construction as well as property extensions. They also apply to alterations which affect the compliance of the building. This is particularly true when the access, use, structure or fire safety of a building is affected.

The responsibility for making sure those undertaking construction are meeting their obligations under the Building Regulations lies with either the Local Authority Building Control (LABC) or an Approved Inspector.

If you’re undertaking development, you will need to make an application to either the LABC or the Approved Inspector for the purpose of engaging their building control services. They will act as a third party statutory authority, assessing plans as well as the site, in order to make sure you meet the Building Regulations.

The owner of the property or land is ultimately responsible for meeting the Building Regulations. This responsibility also extends to any client appointed representatives for building works.   The LABC or Approved Inspector are engaged to help meet this responsibility and advise in tangent on the technical aspects.

Approved Inspectors are private companies, separate from the LABC. They are a popular alternative to using the LABC for various reasons, usually including time constraints. Their building control qualified experts can be the key to efficiently achieving compliance and sign-off, especially on complex projects.

Approved Inspectors were introduced in England and Wales followed the Building Regulations 2010 with the specific purpose of providing a private sector alternative to using the LABC.

There are just fewer than 100 Approved Inspectors in England and Wales on the Approved Inspectors’ register, CICAIR. Being on the register is tightly controlled, subject to stringent auditing and re-licensing processes. Inspectors must comply with the CICAIR Code of Conduct.

Specifically, and pertinent to the current ‘crisis’ mentioned above, Approved Inspectors must have insurance in place from a government-approved scheme which meets the government’s criteria.

You can choose whether to use an Approved Inspector or the LABC – you are still subject to complying with the same Building Regulations.

However, particularly in complex construction, developers, owners and builders will often opt for an Approved Inspector because of the partnership nature of the relationship and the more efficient process. Since Approved Inspectors have been introduced, those undertaking building projects have benefited from the increased competition and greater choice.

Many believe that the introduction of more competition from Approved Inspectors has played a large role in improving safety and quality standards across the industry as a whole.

If you choose an Approved Inspector then the LABC, through the Initial Notice acceptance, will place responsibility on them for making sure you comply with the Building Regulations.

On complex construction projects, the Approved Inspector will be closely involved throughout all of the stages of the development project. Specifically they will:

  • Provide advice regarding the Building Regulations and how they specifically apply to your project.
  • Check your plans and advise on changes, as well as issuing a Plans Certificate if desired.
  • Work in consultation with the fire and water authorities.
  • Undertake inspections of the construction as it develops.
  • Issue a Final Certificate (assuming the completed project is in compliance with Building Regulations).

The role of the Approved Inspector is not one of a supervisor. Inspections take place at different stages. Their role is to check compliance with the Building Regulations.

Given that many developers will opt for Approved Inspectors, it is highly relevant to be aware of the issues being faced by Approved Inspectors themselves. With just under 100 different practices throughout England and Wales, situations which result in reducing the availability of Approved Inspectors stands to jeopardise the all-essential Building Control element of construction projects, and specifically gaining its ‘sign-off’.

This is what is happening as Approved Inspectors are unable to get insurance cover, which they must have to trade legally. The types of insurance they are struggling to get are professional indemnity insurance (PI) and public liability (PL) insurance.

Approved Inspectors have relied on two main insurers – Howdens and Griffiths and Armour. Howdens has pulled out of the market completely. Griffiths and Armour are only now providing cover for existing customers. The result is that Approved Inspectors who have previously been insured by Howdens are unable to secure cover once their existing cover expires.

In such cases, these Approved Inspectors are paralysed and have had to stop working. As those with Howden cover expires, and Griffiths and Armour prove unwilling to take them on, we will see a growing shortage in the availability of Approved Inspectors.

This current situation poses a number of difficulties for the construction industry. Specifically, we will see an increase in delays to project timelines. We are also currently experiencing confusion and concern about what is happening and how it may change.

In addition, and ironically, some within the industry have concerns over what this may mean for safety. Alastair Ferguson, associate director of Assael Architecture explained:

“… There is a real risk that a forced change of Approved Inspector will lead to more buildings with potentially dangerous defects. Transferring responsibility for half-completed work to a second inspector, local authority, or a combination of the two will require very detailed and precise communication.”

It’s also worth noting that it isn’t just Approved Inspectors affected. Following the Grenfell Tower tragedy and the 2010 recession, the fire-related clauses in professional indemnity insurance, as well as increased premiums, are also affecting others in the industry such as fire engineers, contractors and architects.

At HUSH we are helping clients to understand and carefully manage this crisis concerning Approved Inspector insurance.

Primarily, we recommend that for both current and prospective instructions with Approved Inspectors you ask who provides their insurance and what the renewal date is for their existing cover.

Changing Approved Inspector or moving to LABC, during a project can be complex and is likely to cause delays and risks a loss of information and accuracy of their advice if not very closely managed. Therefore, if the Approved Inspector is unlikely, due to their insurance, to be able to meet the requirements of your project, you should consider these options:

Before the Initial Notice has been served:

  • If you reveal that your prospective Approved Inspector will likely face renewal problems during the term of your project then we suggest you appoint a different Approved Inspector (with secure cover in place) or the LABC.

Following the Initial Notice being served but before works have commenced:

  • You can cancel the Initial Notice and then appoint a different Approved Inspector (with secure cover in place) or the LABC.

Once works have started:

  • You can cancel the Initial Notice. You must then notify the LABC and they will provide the service for you instead.

How will the situation develop in the future?

ACAI, who represent the majority of Approved Inspectors in the UK, called on the current Secretary of State for Housing, Robert Jenrick MP, to undertake an urgent review of the situation.

This is imperative. By the end of October, without changes to the status quo, 15 Approved Inspectors representing over 15% of all live projects, will have had to cease trading.

Unfortunately, due to the timing, with parliament’s summer recess and the dominance of Brexit, there isn’t further progress as yet. However, the industry is calling upon the Government to consider changes to the overly stringent and outdated insurance criteria so that the crisis can be alleviated and disruption halted. The criteria must be commercially attractive for insurers.

Local authorities are already overstretched. If we want to avoid costly delays across the industry then the situation regarding Approved Inspector insurance needs to be resolved.

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