RELATING TO INSURANCE. 24/9/2019. 1 T H O M A S P . E N G L I S - PowerPoint PPT Presentation

RISKS & IMPLICATIONS REGULATING TO INSURANCE. 6. DOUBLE INSURANCE: Double Insurance denotes insurance of same subject matter with two different companies or with the same company under two different policies. Insurance is possible in case of indemnity contract like fire, marine and property insurance. Double Insurance policy is adopted where the financial position of the Insurer is doubtful. The Insured cannot recover more than the actual loss and cannot claim the whole amount from both the Insurers. 23 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. 7. PRINCIPLE OF PROXIMATE CAUSE: Proximate Cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The Proximate Cause means that the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss. 24 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. SOURCES OF RISK. Physical Environment. Social Environment. Political Environment. Legal Environment. Operational Environment. Economic Environment. Cognitive Environment. 25 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. LOSS ANALYSIS. Severity = Losses ( € ) / No. of Losses. Frequency = No. of Losses / No. of Exposures. Expected Loss = Losses ( € ) / No. of Exposures. 26 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. LOSS SEVERITY CALCULATION. Maximum Possible Loss / Estimated Maximum Loss. Maximum Probable Loss / Estimated Maximum Loss. 27 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. COMMONLY INSURED PERILS - TRADITIONAL. Fire. Lightning. Windstorm. Hail. Explosion. Smoke. Aircraft & Vehicle Damage. Riot. Vandalism (Malicious Mischief). Falling Objects. Weight of Snow, Ice or Sleet. Water Damage. Glass Breakage. Sprinkler Leakage. Perils of Transportation. Crime Perils. 28 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. DIFFICULT TO INSURE. Earth Movement. Floods. Nuclear Reaction. 29 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. UNINSURABLE PERILS. Against Public Policy. Under the Control of the Insured e.g. suicide. Probability of Loss is Too High. Simultaneous Destruction. War, Terrorism, Rebellion & Insurrection. Intentional Losses. Fading, Rust, Dry Rot & Settling. Production, Marketing & Political Risks. 30 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. FINANCIAL CONSEQUENCES OF A LOSS. Reduction in Value. Debris Removal. Business Interruption. Contingent Business Interruption. Loss of Rental Income. Loss of Rental Value. Loss of Leasehold Interest. Inability to Reconstruct Records. Loss of Use Value in Improvements & Betterments. Demolition Costs & Increased Cost of Reconstruction. 31 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. VALUATION OF A LOSS. Market Value. Replacement Cost. Actual Cash Value. (Replacement Cost & Depreciation). Present Value of the Asset’s Contribution. 32 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. NEGLIGENCE. Acts of Omission. Acts of Commission. Elements: Legal Duty. Breach. Damages {Compensatory (Special, General), Punitive}. Proximate Cause. 33 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. DEFENCES TO NEGLIGENCE. Contributory Negligence. Comparative Negligence. Assumption of Risk. Statute of Limitations. Immunities {Sovereign, Charitable Institutions, Public Officials}. 34 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. RISK CONTROL: Avoidance / Prevention / Reduction / Information Management / Risk Transfers. RISK AVOIDANCE: Proactive Avoidance / Abandonment. LOSS REDUCTION: Salvage / Subrogation / Litigation Management Management / Catastrophe (Contingency) Plans / Duplication / Separation. RISK TRANSFER: Property or Activity Transferred / Contractually Pass the Liability. { Insurance, Non-insurance Transfers ( Do Not Satisfy Conditions to be Insurance; Provide External Funding) / Hedging ( Taking an Offsetting Risk; Not Possible for Many Types of Risks – Interest Rate, Exchange Rate, Commodity Price, Oil Price) }. 35 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. ELEMENTS OF INSURANCE. Contract. Premium. Conditional Benefits. Pooling of Resources. Bodies Involved: Buyer Side of the Market { Risk Managers, Brokers, Consultants }. Supplier Side of the Market { Insurance Company, Underwriters, Claims Adjusters, Agent, Actuaries, etc .}. 36 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. RETENTION Vs. TRANSFER. Ability to Bear the Loss. Cost & Effectiveness of a Transfer. Degree of Control over the Risk. Insurance Loading Fees. Additional Insurer Services. Insurance as a Signal. Opportunity Costs. Taxes. 37 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. RISK FINANCING. Guaranteed Cost - Insurance { Underwriting with Premium Depending on Classification Groupings & Premium Calculated }. Experience-Rated Insurance. Retrospective Rating. 38 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. INSURABLE RISK. Large Number of Homogenous Exposure Units. Accidental. Determinable & Measurable. No Simultaneous Destruction. Probability Calculable & Not Too High. {suicide, space shuttle, mental illness, war, early flight & computers, terminally ill, etc.} 39 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. VALUE OF INSURANCE. Stability. Indemnification. Reduction in Reserve Funds. Insurers’ Ability to Invest. Satisfies Financial Requirements. Specialization in Loss Prevention. Adequate Sum Insured Vs. Underinsured. 40 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. SOCIAL COSTS OF INSURANCE. Insurers’ Operating Costs. Moral Hazard. Exaggeration of Losses. Cheating. { Insurer: Failure to Honor the Contract / Misleading / Contracts / False Advertising / Inappropriate Sales}. { Insured: Fraud}. Cheating leads to increased Litigation & Regulation. 41 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. REQUIREMENTS FOR AN INSURABLE CONTRACT. Offer & Acceptance. Consideration. Competent Parties. Legal Purpose. 42 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. INDEMNITY. Based on Valuation { Property : ACV; Liability : Actual Damages}. { Apparent Exceptions : Valued Policies / Replacement Cost Insurance / Life Insurance}. INSURABLE INTEREST. Property & Liability: {Time of Loss / Ownership / Potential Legal Liability / Secured Creditors}. Life Insurance: { Time of Policy Purchase / Close Ties (Love, Blood, Marriage) / Pecuniary Interest}. 43 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. SUBROGATION. {Prevents Double Indemnification / Holds Down Insurance Costs}. UTMOST GOOD FAITH. {Representations / Concealment / Warranty / Material Fact}. 44 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. INSURANCE REGULATION. Licensing. Solvency. Rate Approval. Agents’ Activities. Insurance Contracts. 45 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. INSOLVENCY OF INSURANCE COMPANIES. Bad Management. Poor Underwriting. Inadequate Reserves. Bad Investing. Inattentive to Loss Prevention. Competitive Pressures. 46 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. OPEN COMPETITION IN INSURANCE. Advantages: Flexibility / Increased Availability of Insurance / Avoid Political Fights / Frees up Time of Regulators. Disadvantages: Price Gouging / Risk of Insolvency / Fair. Causes of Market Failure: Adverse Selection / Individuals Underestimate the Loss Potential / Insurance Costs Too Much / Pooling Not Possible / Insurers Can Not Estimate the Loss Potential. 47 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Construction Methods . Legislative Requirements. Building Standards & Regulations - Building Regulations. Insurance Covers, Implications, Requirements & Problems. Life Safety Issues. Claims Problems. 48 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. FLOOD / STORM / COMBUSTIBILITY / OBSOLESCENCE. This is a concern. The predominate form of M.M.C. in Ireland is timber framed buildings. About 20% of the domestic building stock. Wind storm loading. Ireland = Zone 4 (High), based upon Munich Re natural hazard rating. No noticeable increase in damage sustained. Common Terminology? T H O M A S P . E N G L I S H & A S S O C I A T E S 49

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Construction Methods . Legislative Requirements. Building Standards & Regulations - Building Regulations. Insurance Covers, Implications, Requirements & Problems. Life Safety Issues. Claims Problems. 50 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. HOW IS INSURANCE PLACED? Someone (Insured or their representative) makes a submission; Insurer reviews the contents of the submission; Insurer decides on premium & informs Insured / Proposer of any Conditions / Warranties / Endorsements / Excesses / Deductibles applicable; Insured / Proposer accepts offer of Insurance Cover & pays premium; Insurance Cover activated by Insurer from a specific time and date. 51 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. INSURANCE POLICIES: Household. Apartment Block. What do they cover in fact? 52 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. ‘Insurance Policies’: Have your read them? Do you read them? Do you actually know the extent & range of covers? Do you know the excesses / deductibles? Do you know the conditions / warranties / exclusions? How have you (or your broker) evaluated the covers / policies you have? What were your instructions? Do you actually know what your insurance policies cover? Do they cover your actual liabilities & exposures? HAVE YOU CONSIDERED WHAT CAN GO WRONG???? 53 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. BASIC BUT IGNORED LEGAL REQUIREMENTS: It is a Statutory requirement to maintain records. Fire Safety Certificate Application reports & Grants should be obtained & retained on file. A Safety File for the development is required for conveyancing. A Fire Register / Manual / Log Book must be maintained and be available for inspection by the Fire Service on request. Record drawings are essential to allow Service and Maintenance operations to be carried out effectively. A facility cannot be effectively managed without records. 54 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. What construction system was utilised in the apartments / houses under your control? Masonry. Timber Framed. Metal Framed. Foam. Others. Old or New. Do you know what materials were utilised in the construction of ‘your’ apartments / houses? Were those materials suitable for purpose & for the expected conditions? 55 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. M.M.C. TYPES – Non-Exhaustive. Superstructure Components: Lightweight Cladding Systems: Volumetric / Modular. Composite Panels. Pods. EIFS. Panellised. Aluminium Composite Panels (ACP). SIP’s. Brick Slip. Hybrid / Semi-Modular. Rain Screen. Tunnel Form. Render Systems. Thermal Mass. Timber. Insulating Concrete Formwork. Hanging Tiles. ETFE Roofs. Green Walls. T H O M A S P . E N G L I S H & A S S O C I A T E S 56

RISKS & IMPLICATIONS REGULATING TO INSURANCE. M.M.C. Positives: Design Possibilities. Off Site Construction. Speed of Construction. Insulation Values. Flexible Layout. Cost. T H O M A S P . E N G L I S H & A S S O C I A T E S 57

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Understand: Test Case: MILLFIELD MANOR, NEWBRIDGE, CO. KILDARE. What Happened: Millfield Manor is a development constructed c. 2006 consisting of approximately 98 houses in terraces of 3, 6 and 8 houses and apartments by Barrack Construction Ltd. On the afternoon of the 31 st March 2015 a fire commenced as a result of alleged arson in a house in one of the terraces of 6 houses and spread to total destruction of the terrace of houses within 25 minutes. The Fire Brigade arrived relatively quickly and in interviews the Chief Fire Officer stated that their function was to stop it spreading to an adjacent terrace of houses. Lot of comment about malicious cause, strength of winds, etc. These are secondary factors in relation to the horizontal spread of fire internally. 58 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. 59 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. 60 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. MILLFIELD MANOR VIDEO. (31/3/2015). 61 T H O M A S P . E N G L I S H & A S S O C I A T E S

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RISKS & IMPLICATIONS REGULATING TO INSURANCE. T H O M A S P . E N G L I S H & A S S O C I A T E S 71

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Impact: t: Minor nor. Mode dera rate. e. Major jor. Extr trem eme. e. Negligi igible le Likelihood: elihood: Almos ost Certain. tain. 5. 5. 10. 15. 20. 20. 25. 25. Likely ely. 4. 4. 8. 8. 12. 12. 16. 20. 20. Poss ssible. ible. 3. 3. 6. 6. 9. 9. 12. 12. 15. 5. Unlikely ely. 2. 2. 4. 4. 6. 6. 8. 8. 10. Rare. e. 1. 1. 2. 2. 3. 3. 4. 4. 5. 5. 72 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Likelihood: 2. Impact: 4. Risk: 8. Priority: B. High Priority. 73 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Colindale, London – 220 Apartments: 74 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Colindale, London – 10 – 12 minutes into the Fire: 75 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. 76 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. DEPARTMENT OF ENVIRONMENT: Building Standards. The design and construction of buildings is regulated under the Building Control Acts 1990 to 2014, in order to ensure the safety of people within the built environment. Building Control Act 1990. Building Control Act 2007. Building Control (Amendment) Regulations 2014. Technical Guidance Documents (T.G.D.). Department Of Environment – Fire Safety Guides. HomeBond Insurance / Premier Insurance / Latent Defects, etc. 77 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. The fire safety principles on which the ‘ Guide to Fire Safety in Flats, Bedsits & Apartments ’ is based are adopted primarily to protect life. These principles may be summarised as follows: (i) Avoidance of outbreaks of fire; (ii) Provision of escape routes which are protected from fire and smoke to allow occupants to leave the building safely; (iii) Early detection of fire and early warning to occupants to facilitate safe evacuation; (iv) Early suppression of fire, where this is feasible; (v) Limitation of the development and spread of fire; (vi) Containment of fire and smoke to the room or flat where the fire originates; (vii) Management of fire safety. 78 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. LEGAL TITLE: When buying a house / apartment what are the minimum requirements for Conveyancing Purposes? What is the purpose of Conveyancing? To ensure good clean title. Pre – BCAR 2014: Probably most important document for a House / apartment was the availability of a HB 11 Certificate from HomeBond or Premier Insurance Completion Certificate. Provided ‘10 Year Structural Guarantee’. CAVEAT EMPTOR: It is the view of the conveyancing committee that every purchaser of a property should be advised in writing to have the structure of the building checked out either by a qualified engineer or architect. It would be prudent for the solicitors not to recommend any particular architect or engineer but rather that clients should find for themselves the persons with the necessary qualifications to give them a satisfactory report. If solicitors fail to give clients such advise and it subsequently transpires that it cost the clients a lot of money to carry out work to the structure that they did not take into account when they decided to buy the house, they may issue proceedings for negligence. Law Society Gazette 1992. 79 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. FIRE RISK ASSESSMENT (F.R.A.): An essential record to have or to prepare. Original Fire Safety Certificate (F.S.C.) application will have included an F.R.A. F.S.C. Application & Grant can be retrieved, if not on record. I.S.3218:2013 states all Residential Buildings should have a F.R.A. Must be carried by a Competent party. Building Control Regulations (B.C.A.R.) emphasise the need for Risk Analysis. Department of Environment has issued T.G.D. B – Fire Safety – Volume 2 – Dwelling Houses and deals somewhat with Timber Framed Buildings. T.G.D. B – Fire Safety (now known as Volume 1) is under review at present & will be issued for public consultation possibly early next year {probably after the final Grenfell Report is issued}. 80 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. BASIC KNOWLEDGE OF HOUSE CONSTRUCTION. Traditional / New Systems. Suitable Materials./ Structurally Sound / Waterproofed. Ease of Access & Egress. Means of Fire Spread (Internal & External). Cavities / Shafts. Fire Safety. Means of Escape. Is there a design available? Has it been tested in real life test situations? Is there an Agrément Certificate for the particular design / innovative product? Are there clear Manufacturer’s Instructions in relation to the erection, fitting out, future maintenance, etc. of the particular house construction system? 81 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. SOMETHING GOES WRONG??? Increased Insurance Costs; Potential Legal Costs; Possible prosecution; Loss of reputation; Loss of Property / Foreclosure; Loss of Home; Bankruptcy; Jail; etc. T H O M A S P . E N G L I S H & A S S O C I A T E S 82

RISKS & IMPLICATIONS REGULATING TO INSURANCE. EXAMPLES of Potential Problems: Using lightweight and combustible materials may cause a greater degree of fire spread, leading to increased claims costs. Modular construction can cause hidden gaps that can lead to even a small incident causing a disproportionately high loss. Expensive delays can occur if a pod in situ needs to be removed, causing disruption and removal of surrounding pods. Increased risks of water damage and storm losses due to the materials used and the effects of wear and tear over time. M.M.C. materials’ ability to withstand the effects of flooding is unknown in many cases. As many M.M.C. systems are new and innovative, contractors may have no previous experience of the materials and assembly techniques required. Problems of obtaining replacement components in the future, especially if a particular manufacturer goes out of business. T H O M A S P . E N G L I S H & A S S O C I A T E S 83

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Assigned Certifier’s Role {Building Control Regulations 2014 }. {B.C.A.R}. The Assigned Certifier is assigned by the Building Owner as required under the Building Control Regulations. They undertake to inspect, and to co- ordinate the inspection activities of others during construction, and to certify the building or works on completion. The role of Assigned Certifier does not include responsibility for the supervision of any builder. They may or may not be a member of the design team. Technical Guidance Document B - 2017 - Fire Safety – Volume 2 – Dwelling Houses. Technical Guidance Doc D - 2013 - Materials & Workmanship. T H O M A S P . E N G L I S H & A S S O C I A T E S 84

RISKS & IMPLICATIONS REGULATING TO INSURANCE. ISSUES OF CONCERN – 1. Water Leaks {Prevention & Emergency Plans}. Frost Damage Prevention. Combustible Waste Storage {away from buildings, secure, cigarette ends, arson, etc.}. Fire Compartmentation & Inspections {include details in Fire Register including maintenance & inspection of fire doors , ensuring not wedged open, self-closers operate correctly, etc.}. Fire Stopping Details {especially after any construction works}. Building Preventative Maintenance {including roofs, gutters, drains, pumps, etc.}. Passenger Lifts {maintenance, statutory inspections}. Emergency Lighting {maintenance, inspections, confirmation certification}. 85 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. ISSUES OF CONCERN – 2. Fire Detection & Alarm Systems {weekly tests, maintenance, emergency plans (including authority to silence alarms, confirmation documentation, type of system}. Fire Extinguishers {maintenance, training of residents, contractors}. Fire Emergency Plans {escape routes, summoning emergency services, fire drills for residents}. Slips & Trips {including during cleaning, icy weather, construction works, condition & maintenance of paths / roadways}. Contractor Controls / Own Maintenance Man {control of operations, Hot Works, machinery, work at a height, access to roofs / attics / voids / lift shafts, electrical installation inspection / maintenance , etc.}. 86 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. ISSUES OF CONCERN – 3. Building / Apartment Security {outbuildings, physical, lighting, staying alert / neighbourhood watch, intercom procedures, w indow opening restriction <90mm (legal requirement since 2017), balconies (internal, external, stairwells, timber deck / maintenance), barbeques, roof garden balustrade (heights > 1100mm), vacant apartments / going on holidays, car park safety, etc.}. Basement Car Parks {location of waste bins, oil tanks, gas meters, electrical rooms, etc. beneath or beside services & cables, fire stopping}. Safety Management, Risk Assessments, Safety Statement. Heating Boilers {annual maintenance records}. Trees near buildings. Others {chimneys, use of candles, smoking}. 87 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. FIRE TEST - BEDCLOTHES. 88 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Cavan Orphanage Fire – 1943: In Cavan there was a great fire, Judge McCarthy was sent to inquire, It would be a shame, if the nuns were to blame, So it had to be caused by a wire. — Flann ann O'Brie ien n & Tom O'Higg ggins ns 89 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Needs & Wants of Construction: Shelter. Warmth. Space. Suitable for Occupation Type Domestic / Commercial. Cost Effectiveness. Build-ability. Maintenance / Repair-ability. Long Term Value. Insurability. T H O M A S P . E N G L I S H & A S S O C I A T E S 90

RISKS & IMPLICATIONS REGULATING TO INSURANCE. BASIC BUT IGNORED LEGAL REQUIREMENTS: It is a Statutory requirement to maintain records. Fire Safety Certificate Application reports & Grants should be obtained & retained on file. A Safety File for the development is required for conveyancing. A Fire Register / Manual / Log Book must be maintained and be available for inspection by the Fire Service on request. Record drawings are essential to allow Service and Maintenance operations to be carried out effectively. A facility cannot be effectively managed without records. 91 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. LEGAL TITLE: When buying a house / apartment what are the minimum requirements for Conveyancing Purposes? What is the purpose of Conveyancing? Pre – BCAR 2014: Probably most important document for a House / apartment was the availability of a HB 11 Certificate from HomeBond or Premier Insurance Completion Certificate. Provided ‘10 Year Structural Guarantee’. 92 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. HOMEBOND GUARANTEE: 1. Guarantees the dwelling against major structural defects for ten years. 2. Guarantees the dwelling against water & smoke penetration for the first two years of the warranty period. 3. Guarantees protection against loss of deposit or stage payments before the house is completed. 93 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. HOMEBOND ‘COVER’: " Liability Period " means the period of ten years from the date of issue of the Final Notice save and except in respect of a Major Defect falling within sub-paragraph (b) (i.e. smoke penetration) or (c) (i.e. water penetration) of the definition of Major Defect below in which event the Liability Period shall be 2 (two) years from the date of issue of the Final Notice. 94 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. "Major Defect" , in the case of a Dwelling which is not an Apartment, means: (a) any major defect in the foundation of a Dwelling or in the load bearing parts of its floors, walls and roof or in any retaining walls necessary for a Dwellings support which defect affects the structural stability of the Dwelling; (b) any major defect in the Dwelling directly resulting in smoke penetration from a chimney breast into the habitable areas of the Dwelling, save and excluding smoke penetration caused by down draught and / or air starvation; or (c) any major defect in the Dwelling directly resulting in water penetration through the main structural elements, roof flashings or roof valleys of the Dwelling. (d) any major defect in the Dwelling directly resulting in water penetration through the main structural elements, roof flashings or roof valleys of the Dwelling. 95 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. CAVEAT EMPTOR: It is the view of the conveyancing committee that every purchaser of a property should be advised in writing to have the structure of the building checked out either by a qualified engineer or architect. It would be prudent for the solicitors not to recommend any particular architect or engineer but rather that clients should find for themselves the persons with the necessary qualifications to give them a satisfactory report. If solicitors fail to give clients such advise and it subsequently transpires that it cost the clients a lot of money to carry out work to the structure that they did not take into account when they decided to buy the house, they may issue proceedings for negligence. Law Society Gazette 1992. 96 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. LAW SOCIETY CONVEYANCING HANDBOOK STATES: All lenders require that new dwellings are HomeBond protected & registered with the HomeBond scheme. Before a Solicitor allows his client to enter into abuilding contract with a builder he should ensure that the Form HB10 has issued which incorporates the protection that comes to his client from HomeBond. Before completion & before the balance of purchase monies is paid over, the Solicitor should ensure that the Final Certificate HB11 has issued & he should not accept an undertaking with regard to same. 97 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Premier Insurance: Compliance with Building Regulations: The Standards in the Technical Manual require compliance with the current Building Regulations for England and Wales, Scotland and Northern Ireland as applicable, in force at the time the Initial Certificate was issued for the Housing Unit where applicable and require compliance with all other statutory requirements relating to the design and construction of dwellings. They also include some requirements which are not covered directly by Building Regulations, such as internal decorations and external works. However not specified as such in Ireland. 4 – 11 inspections per unit / property – to ‘ check suitability for Insurance ’. 98 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Workmanship Requirement: All works shall be carried out in a neat and workmanlike manner in accordance with relevant Standards and Codes of Practice’ Structural Design Requirement: Structural design shall be carried out by appropriately qualified persons in accordance with relevant Standards and Codes of Practice. Enhanced Standards Requirement: Where a Housing Unit has been accepted for insurance and the standard of design and materials applicable to that Housing Unit is intended to result in a performance superior to the statutory requirements e.g. (but not limited to) the Code for Sustainable Housing, LPS 2020 and its enhanced performance modules, those higher standards will become part of the Functional Requirements. 99 T H O M A S P . E N G L I S H & A S S O C I A T E S

RISKS & IMPLICATIONS REGULATING TO INSURANCE. Your ‘Insurance Policies’: Have your read them? Do you read them? Do you actually know the extent & range of covers? Do you know the excesses / deductibles? Do you know the conditions / warranties / exclusions? How have you (or your broker) evaluated the covers / policies you have? What were your instructions? Do you actually know what your insurance policies cover? Do they cover your actual liabilities & exposures? HAVE YOU CONSIDERED WHAT CAN GO WRONG???? 100 T H O M A S P . E N G L I S H & A S S O C I A T E S