Council warns of insurance action over combustible cladding

Council warns of insurance action over combustible cladding | Insurance Business

Council warns of insurance action over combustible cladding

New Zealand’s insurance industry is warning building owners about exterior combustible cladding.

In an article with Stuff, Insurance Council of New Zealand chief executive Tim Grafton outlined that insurers would be assessing buildings with flammable external cladding for increased fire risk.

The warning follows the decision by the United Kingdom Government to ban combustible cladding on the outside of high-rise buildings on the back of the Grenfell Tower fire tragedy in 2017. The ban includes all new schools, hospitals, care homes, student accommodation and residential houses higher than 18 metres.

Grafton told the publication that the effect on policies would depend on the type of panels and the extent of their use on the exterior of buildings. There were three types of panels – those with a 100% polyethylene core, those that were fire-rated and “somewhat” less flammable, and non-combustible panels.

Insurers, reportedly, have concerns about high rise buildings with attached aluminium composite panelling running all the way up with a combustible polyethylene core. Grafton noted that insurance companies had available to them “the usual insurance responses” including raising premiums, changes to deductibles or excesses and policy exclusions such as excluding certain damage to a building if it was caused by a fire to the polyethylene core.

Stuff reported that councils had identified a number of buildings with ACP cladding but not all the buildings had been identified as to what core was used inside the panels.

Insurers may assess the risks as buildings come up for insurance policy renewals, Grafton suggested.