According to the Structural Timber Association (STA) 18% of new homes are now constructed using timber frame as home builders and developers seek cheaper, quicker and more sustainable methods of construction. Cross Laminated Timber (CLT), an engineered form of timber, is also increasingly becoming a viable alternative building material to concrete, brick or steel, even in some cases for high rise buildings.
However this prevalent use of timber brings with it increased risk, particularly during the construction phase. Whilst under construction exposed timber is much more susceptible to ignition sources such as cigarette ends, hot works and arson.
If a fire does occur during works on a timber frame construction, the potential for a devastating fire (or in insurance language a “total loss”) is so much more than if the construction were “traditional” brick and cavity wall.
As a consequence, insuring the contract works (work in progress and materials for incorporation into the works), and public/employers liability for timber frame projects can be complicated and expensive as the increased fire risk unfortunately means high premiums and more restricted cover.
Insurers will generally look to reduce their exposure by only underwriting timber frame projects where the risk is very well managed. Some insurers will refuse to insure timber frame projects altogether.
For timber frame projects (including CLT), insurers willing to underwrite such risks will look for favourable features such as:
Phasing
If a contract is split into phases this can greatly reduce the insurers Estimated Maximum Loss or “EML” from fire. Insurers will be particularly interested in the project’s GANTT chart to see how the works are scheduled.
Increased security
Additional security such as manned guards can greatly reduce the risk of arson.
Fire breaks
Thoughtful design incorporating fire breaks can help to stop fire spread.
Compartmentalisation
Reducing the amount of combustible material where possible and treating materials with fire retardant helps reduce the severity of a fire.
Robust risk management
Projects where the fire risk has been thoroughly assessed and the risks addressed are far more attractive to insurers. This would include, as a minimum, strict adherence to the Joint Fire Code, where applicable.
Relevant experience using timber frame or CLT
Insurers will look for contractors’ relevant experience in these types of projects.
Even after the construction phase, timber frame properties will continue to pose a greater risk to insurers. Whilst a timber framed building may not be any more vulnerable to fire once fully built, if a fire does occur the chances of the loss being more severe is much greater. When arranging “Property Owners” insurance, the buildings’ owners will be obliged to inform their insurers of its construction type and may then face having to pay higher premiums. If the timber frame is not disclosed to insurers, there is a risk that the policy can be invalidated for “non-disclosure of material facts”.
It is important to stress that the use of timber frames or CLT within construction projects is not all negative, indeed the benefits derived from this more sustainable construction method means that its use is likely to grow. However any developer or home builder must consider all the risks and additional hidden costs (such as increased insurance premiums) before embarking on a timber frame project.
As specialist insurance brokers to the construction industry, Construction Risks UK has expert knowledge and extensive experience of insuring timber frame projects and can guide and advise you on all of the insurance implications. Please don’t hesitate to contact us today to discuss your project.
