What is PAS 9980?
It is a code of practice which sets out a method for competent professionals to conduct Fire Risk Appraisals of External Wall construction (FRAEW) for existing multi-storey, multi-occupied residential buildings.
Many buildings will not require an FRAEW. All multi-occupied residential buildings with 2 or more sets of domestic premises now require the Fire Risk Assessment required under the Regulatory Reform (Fire Safety) Order 2005 (the Fire Safety Order) to include an assessment of their external walls. In many cases, this is will not require a detailed review of their external walls. It is up to the fire risk assessor to identify that the risk of dire spread is sufficiently low that a FRAEW is not required.
PAS 9980 assessment seeks to categorise buildings into one of four categories of risk – Low, Medium tolerable, Medium intolerable, or High – the latter two categories requiring mitigation or remedial works in order to render the buildings safe for occupation.
What is the effect on insurance?
This is best explained by way of an example. To achieve compliance with Building Regulations, a building over 18 metres would likely require the removal and replacement of combustible insulation and rectification of missing and/or defective cavity barriers. For the purposes of an FRAEW conducted in accordance with PAS 9980 however, the assessor may well form the view that the combustible insulation presents a tolerable level of risk (and can therefore remain in situ), provided that the defects to the cavity barriers are addressed, or other mitigation measures introduced.
This conflict in standard of remediation causes a challenge for the insurance market. PAS 9980 focuses on the safety of occupants in the event of a fire, but insurer, when deciding whether to take on a risk, will be wanting to understand the building's ability to withstand or minimise damage. Given that the risk associated with a building that adheres to the letter of the Building Regulations will likely be of a lower risk than one subject to a PAS 9980 assessment, these two competing interests have resulted in a very cautious approach being taken by insurers, seeking to minimise their risk when underwriting policies in this sector.
Given the potential issues that arise in obtaining insurance at a reasonable price on a building remediated to a PAS 9980 standard, it is important that building owners take steps to engage with insurers at the earliest opportunity and before a risk-based remedial solution is undertaken.
What happens if you can't get insurance?
Should the worst-case scenario happen, the cost consequences of owning a building without insurance are extremely significant. In addition, uninsured buildings will not support lending, either to the freeholder or the leaseholders.
As with previous issues, and the demand of EWS1 forms by lenders, it may well be that the Government might need to intervene, to try and avoid the insurance market from excluding cover for buildings that are remediated to the PAS 9980 standard or retain otherwise compliant combustible elements. This is particularly important given the Government's current drive towards buildings being assessed and remediated in accordance with this new PAS 9980 risk-based approach. If the market cannot resolve this, the Government may need to become the insurer of last resort.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
