The geographical location of property, age of the building, nature of business, security and safety mechanisms can all impact a building’s premium rate.
One factor which may not be at the forefront of clients’ minds is the material used in the construction of their buildings.
The cheapest, most physically convenient or energy efficient may well be a company’s choice. However, these can come with hidden hazards like being highly combustible, releasing toxins or producing high amounts of heat and/or smoke.
From an insurer’s perspective, hazardous construction materials can cause quite drastic increases on premium levels due to the increased risk; insurers may even refuse to quote on this basis. Alternatively, insurers may require the client to implement risk improvements which can be challenging and expensive.
Differences in construction material can have a significant impact on the spread of fire. One of the key factors is combustibility. Insurers use classifications to assess this element of risk. For example, ISO classifications range from 1 (highly combustible) to 6 (fire resistant).
Beyond insurer’s risk assessments and premium levels, choice of construction material can also impact on the transferability of assets, buildings sustainability and life span.
The Government announced a toughening on building standards in the recent Queen’s Speech (14/10/2019) with potential criminal charges for those who fail to meet the standards.
Lothbury can arrange for insurers’ specialist risk engineers to assist you in ensuring that you select the best suited construction materials from the outset – Get in touch to discuss further.
