A panel of leading experts discussed the causes of the Grenfell Tower tragedy and cladding risks in Australia, as well as the future and the present challenges related to the issue in a Zurich sponsored session on Tuesday at the 2018 NIBA Convention.
The panel included Troy Bates, Real Estate Practice Leader – Australia, Aon Risk Solutions, Mathew Sigmund, Station Officer, Team Leader, Building Cladding Taskforce, NSW Fire & Rescue andPeter Johansson, Senior Risk Engineer, Zurich.
All three experts agreed that a pragmatic approach needs to be taken while managing cladding risks. Bates stressed that residential assets were more at risk than solely commercial buildings and cladding was not just a high-rise issue.
Sigmund said, “We’re moving forward, there is awareness of the issue and we’re in a much better place to effectively manage risks than we were 12 months ago. Due diligence is important and fire services are prepared.”
Johansson advised, “Don’t believe everything you read in the media, do you own research. Also, there is a lot of hear say when it comes to various certifications and that is how risky cladding makes it into buildings.”
The key take aways from the session included:
1. Cladding has changed the perception of risk in real estate.
2. The Grenfell Tower tragedy was an outcome of a toxic mix of issues including cladding
3. The assessment process and along with the steps and questions brokers need to consider when developing a risk approach.
4. The insurance market can manage this risk and lessons can be learned from other areas
5. With so much focus on buildings, an impact is being felt by professionals and consultants regarding Professional Indemnity insurance
Bates stated, “Don’t hide from aluminium composite panels (ACP) exposure, talk to your clients and to underwriters. The existence of ACP is just an indication of a risk and not an issue in itself.”