Grenfell Tower fire (2017)
London, June 14, 2017: 72 dead in a social housing tower reclad with combustible panels. The public inquiry, the Building Safety Act 2022 and construction professional liability cover that is no longer underwritten the old way.
Shortly before 1 a.m. on June 14, 2017, a fridge-freezer catches fire in a fourth-floor apartment of Grenfell Tower, in North Kensington. The fire escapes through the window, reaches the cladding installed during the 2015-2016 refurbishment, aluminum composite cassettes with a polyethylene core over combustible insulation, and climbs the facade in under half an hour. Seventy-two people die. The final report of the public inquiry, published on September 4, 2024, concludes that every one of those deaths was avoidable, and speaks of "systematic dishonesty" among the panel and insulation manufacturers, who knew how their products behaved in a fire and presented them otherwise. For insurers, Grenfell was first a professional liability event. From 2018, professional indemnity carriers for architects, engineering firms and facade consultants asked for a list of every high-rise the insured had worked on, sometimes over twelve years, then added cladding exclusions, later widened to fire safety in general, or aggregate sublimits. Several firms found themselves without cover for what was their core business. The Building Safety Act 2022 raised the exposure further. Section 135 extends the time to sue under the Defective Premises Act from six to fifteen years going forward, and to thirty years, retroactively, for rights that accrued before June 28, 2022. The UK Supreme Court, in URS v BDW (May 21, 2025), held that this retroactive extension reaches the dependent claims in negligence and for contribution. Because professional indemnity is written on a claims-made basis, today's policies receive the claims on projects from the 1990s. For a firm that has closed, run-off cover responds, where it still exists.
Textbook case, in numbers. A facade engineering firm carries professional indemnity of 10 million pounds per claim, with a 2 million pound annual aggregate sublimit for fire safety and a 50,000 pound excess per claim. Three claims arrive in the same year on buildings delivered between 1998 and 2006: 1.5, 0.9 and 0.8 million, or 3.2 million. Excesses: 3 x 50,000 = 150,000. That leaves 3.05 million against a 2 million aggregate: the insurer pays 2 million and the firm keeps 1.05 + 0.15 = 1.2 million, which is 3.2 - 2 million.
Grenfell, Grenfell fire, Grenfell Tower Inquiry, ACM cladding fire
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