The Building Safety Act and insurance-funded property repairs

The Building Safety Act 2022 (BSA) was an outcome of the Grenfell Tower tragedy and is a reform to the operation of building regulations in England, introducing new roles and responsibilities to radically improve building quality and safety. 

The Building Safety Act has additional requirements for high-risk buildings, which are defined as any building that is at least 18 metres in height or comprises seven storeys and contains two or more residential units.  

Manage and control risk 

On 1 October 2023, the Building Control Authority was launched, with new regulatory, inspection, and enforcement powers. These apply to the design and construction of new structures, the refurbishment of buildings, and their ongoing safety management while occupied.  

Amended secondary legislation includes the Building (Amendment) (England) Regulations 2024 and changes to the Defective Premises Act.  

It is important to note that this, along with the Construction (Design and Management) Regulations 2015 and other legislation outlining general obligations under the Health and Safety at Work Act 1974 (HSWA), is managed under criminal rather than civil law.  

It’s also worth noting that under the HSWA, noone has to have been harmed for an offence to be committed; there only has to be a risk of harm. The most important requirement is that risk must be actively managed and controlled.  

Proactive action must be taken - paperwork alone does not prove compliance.  

Current regulations and emerging legislation are complex and can have tangible business impacts if mismanaged. Effectively, the BSA details that appointed accountable persons (the individual responsible for a high-risk building) must take all reasonable steps to prevent building safety incidents and reduce their severity if they do occur. The accountable person could face legal proceedings if found to have failed in these responsibilities.  

However, the HSE or the Regulator also has the power to prosecute individual directors, partners or managers if a breach of regulations occurs with their explicit or implied consent or negligence in the commissioning, development, and management of high-risk building work. This alone highlights the need for a thorough review of Directors and Officers (D&O) insurance for any organisation involved in this type of activity.   

Heightened scrutiny 

The ramifications of this Act are complicated and, in some areas, ambiguous. There’s confusion among the many parties managing insurance claims involving construction and building repair work in understanding the Act and when it applies.  

For example, how do you know when repair work proposed for a defined high-risk building requires referral to the regulator? How do you identify the accountable person and the ultimate client?  

There is also some uncertainty around what happens when working to repair damage in common areas, such as hallways and reception areas in larger multi-occupancy buildings.   

The BSA also heightens scrutiny of the competency of building contractors and other industry professionals, requiring greater transparency and diligence to promote and raise standards in building design, construction, management and repair.  

All of this puts tremendous pressure on the insurance-related building repairs supply chain, with many contractors preferring not to work on properties where failed repair work potentially attracts the risk of high penalties. 

Behavioural change 

Another BSA requirement is the creation of a ‘golden thread’ of information throughout the building lifecycle, which means maintaining meticulous records.  

In addition, it places greater emphasis on fire safety and increases the requirement for regular structural surveys, risk assessments, and any implementation of necessary maintenance works. Duty holders must register properties with the Building Safety Regulator and provide safety information to all residents.   

In a January 2025 speech, Dame Judith Hackitt, author of the post-Grenfell report, Building A Safer Future, criticised the lack of behavioural change in construction, highlighted as a necessity in her post-Grenfell report.  

Dame Hackitt said: “an appalling attitude continues to prevail” despite the BSA being in force. She said: “it is time for us to name and shame those who continue to try to game the new system” and that when a prosecution does happen, it may “galvanise a few more into action”. 

Mitigating the risks 

Risk managers should check that safety risks for all buildings are managed within legislative requirements and that all properties are safe for occupation:  

• Consider carefully who is appointed to carry out any repair works and check the competency of the individuals concerned, ideally via one of the scheme registers.  
• Consider the impact of the significant BSA amendments to the Defective Premises Act (1972), where owners are now advised to hold records for 15 years and keep a register of notified building defects.  
• Adapt and enhance risk assessments to allow for new safety checks and measures, including appointed duty holders and accountable persons.  
• Check that on insurance-related building claims, where building regulation approval is required, the client appoints duty holders, like the principal designer and principal contractor. The client is usually the insurer, but on commercial claims, the client is the insured. If the client doesn’t appoint duty holders, they are deemed to be the duty holder, and if prosecuted, imprisonment and unlimited fines could apply. 

• Review professional indemnity, D&O and liability cover in light of these reforms. 

 A proactive and robust approach to meeting the requirements of the Building Safety Act will help reduce future risks and enhance property portfolio safety standards.