Navigating the Insurance Landscape Under the Building Safety Act 2022

The Grenfell Tower tragedy claimed 72 lives, resulting in the most far-reaching reform of building and fire safety law in 40 years - the Building Safety Act 2022 (BSA). For insurers, brokers, and loss adjusters, the Act marks a turning point, redefining liability exposure and driving major change across underwriting, claims handling, and professional standards.

From Grenfell to Reform

The Grenfell fire exposed systemic failures and “a culture of box-ticking” rather than genuine safety assurance. The 2018 report, Building a Safer Future, laid the groundwork for a legislative overhaul based on three pillars: accountability, competence, and transparency.

The BSA embeds these principles into every stage of a building’s life cycle. There are new regulatory bodies, mandatory reporting and approval gateways. Responsibility for safety is now held by clearly defined “accountable persons.” Importantly, its reach extends far beyond new high-rise developments to include refurbishment and remediation works, ensuring that legacy defects cannot escape scrutiny.

Scope and Reach of the Act

Although the Act’s core concern is high-risk buildings—defined as those at least 18 metres or seven storeys high containing two or more residential units—it also applies to hospitals and care homes. Hotels and secure institutions such as prisons are excluded.

All high-risk buildings must be registered with the Building Safety Regulator (BSR) which sits alongside two new bodies - The National Regulator for Construction Products and The New Homes Ombudsman. Together, these bodies mark a decisive shift toward proactive oversight and consumer protection.

Key Duties and Compliance Obligations

The BSA assigns legal responsibility for building safety to accountable persons—individuals or organisations responsible for occupied high-risk buildings. They must maintain a detailed safety case report identifying major fire and structural hazards and demonstrating how risks are controlled “so far as reasonably practicable.” These reports must be updated regularly and submitted to the regulator at least every five years.

Accountable persons must also implement residents’ engagement strategies and mandatory occurrence reporting systems to flag any event posing a significant risk to life. Failure to comply can result in enforcement action or criminal prosecution.

Additionally, dutyholders—designers, contractors, and principal responsible persons—must now demonstrate competence throughout design, construction, and occupation. Building control itself becomes a regulated profession, with inspectors required to meet defined competency standards for the first time.

The Gateway System and the “Golden Thread”

At the heart of the BSA are three “gateway” approval stages that govern the design and construction of high-risk buildings:

1. Gateway One – planning stage: fire safety must be considered before planning permission is granted.

2. Gateway Two – pre-construction: the regulator must approve the detailed design, confirming compliance with building regulations. No work can begin without this sign-off.

3. Gateway Three – completion: before occupation, the regulator must confirm the building meets all safety requirements.

Central to this process is the “golden thread” of information—a secure digital record capturing a building’s design, construction, and maintenance data throughout its life cycle. This thread is both a compliance mechanism and a potential defence tool for insurers, providing evidence of diligence and regulatory alignment. However, maintaining it imposes new administrative burdens on clients and their insurers alike.

Implications for Insurers and Loss Adjusters

The Act’s impact on insurance markets is already being felt across underwriting, claims, and professional indemnity (PI) lines. Several key consequences are emerging:

· Higher Claims Costs and Longer Timelines: Claims involving high-risk buildings now often require regulatory approval before repair work can begin which can delay reinstatement and inflate additional costs such as alternative accommodation.

· Expanded Liability Exposure: With the Defective Premises Act limitation period extending to 30 years, historic defect claims may now resurface.

· Professional Indemnity Pressure: Professionals such as architects and contractors face increased scrutiny of competence and design documentation. This raises both the cost and complexity of PI cover. As such some professionals may be reluctant to engage in high-risk remediation projects.

· Public Authority Requirements: Expensive upgrades—such as sprinkler systems or compartmentation— maybe required to meet current safety standards. Even if such works were outside the original claim scope, insurers may still need to fund them to secure approval.

Strategic Considerations for the Insurance Market

As the Act embeds itself into practice, insurers must recalibrate their approach across several dimensions:

1. Enhanced Due Diligence: Underwriters must scrutinise the competence and compliance of all parties involved in a project. This extends beyond structural risk to governance, design documentation, and safety reporting practices.

2. Reserving for Longer-Tail Liabilities: The 30-year limitation period requires insurers to maintain reserves for potential historic claims and to factor in longer claim lifecycles during pricing.

3. Supporting the Golden Thread: Insurers can add value by helping clients maintain robust digital safety records. This not only supports compliance but may also protect against negligence or breach-of-duty allegations.

4. Collaboration with Loss Adjusters: Loss adjusters will play an increasingly valuable role in navigating the new regulatory processes and managing claims efficiently. Their expertise will be essential in coordinating consultants, regulators, and policyholders.

Challenges and Opportunities

While the BSA increases operational complexity, it also raises standards of accountability and competence, which may ultimately reduce uncertainty and improve safety outcomes. This should benefit insurers through lower claim frequency and severity in the long term.

However, success will depend on collaboration. Insurers, brokers, and adjusters must work together to interpret the Act consistently and embed compliance into every stage of building repairs and management.