The closure of the Wren Insurance Association on 1 July marks a pivotal shift in how professional indemnity (PI) risk is managed across the construction sector. Wren has stopped offering renewal terms to its 63 member practices. Existing policies will continue until expiry and claims already notified will still be handled. Once those policies lapse, former members will need to secure cover in the open commercial professional indemnity market.
Since Grenfell, Wren has been one of the few insurers prepared to offer meaningful cover for cladding-related exposure. Its exit removes an important option for architects whose work involves façades, fire safety or residential buildings – all of which remain sensitive risk areas.
As Daniel White, Sales Director of Consort Insurance explains: “Wren absorbed a high number of notifications relating to pre-2019 work, claims many commercial insurers were reluctant to cover, and that meant the exposure eventually became unsustainable. Wren asked members for additional funds beyond normal premiums to shore up reserves. Several practices decided the cost wasn’t worth it and signalled they would likely leave. A mutual needs enough members to spread risk and operate efficiently. Once departures reached a critical mass, Wren’s board concluded it could no longer offer competitive cover.”
WHY CLADDING AND FAÇADES REMAIN UNDER SCRUTINY
Insurers remain highly alert to risk in cladding and fire related design. High-rise residential buildings, façade design, fire engineering services and remediation projects continue to attract the most intense underwriting scrutiny. That doesn’t mean insurance is unavailable, but it does mean insurers are selective.
White says: “Exclusions or sub limits for these areas have been more common when the insurance market hardened. As general market conditions have improved, insurers can provide cover if you can demonstrate product traceability, strict governance and compliance processes but the scrutiny is intense and generally reserved for best of sector.”
This is where specification and system clarity become relevant beyond aesthetics or cost. Valcan sees how non-combustible systems, transparent testing data and clearly documented system performance can reduce ambiguity. From an insurer’s standpoint, ambiguity equals uncertainty and this is priced as risk.
PI should now be treated as a strategic risk issue, not an annual administrative exercise. White advises: “Make sure the broker you select is competent in a complex professional indemnity placement. The market will be restricted, so the temptation might be to go to multiple brokers, but any more than two won’t give you the best outcome. Selecting one may seem counter intuitive, but interviewing several and then appointing one from there could well deliver the best result this year.”
Policy wording also demands closer attention. Commercial insurers are more inclined to apply exclusions, aggregation clauses and restrictive notification triggers. Run off cover is particularly important, given that PI exposure can extend 12 years or more beyond project completion.
Contractual obligations should also be reviewed. Many appointments require insurance to be maintained “on no less onerous terms”. If exclusions widen, particularly around cladding, firms may find themselves technically in breach unless this is addressed proactively with clients.
On higher risk schemes, particularly residential towers or façade heavy developments, insurance constraints may increasingly influence procurement decisions. Insurance is now part of delivery risk, not just a compliance checkbox.
White’s advice is simple: start early and seek specialist advice. While the PI market is softening overall, with rate reductions of around 10–15% forecast for well managed risks, that improvement is far from universal. Firms with cladding exposure, weak documentation or poor claims histories are unlikely to benefit.
As White notes: “The gap between good risks and difficult risks is widening. Specialist advice can make the difference between securing workable cover and facing exclusions that materially affect a firm’s ability to operate.”
Wren’s closure is a signal, not an anomaly. It reflects a broader recalibration of professional risk following Grenfell and ongoing regulatory reform.
Architects once supported by a bespoke, member-driven mutual are now operating in a commercial market shaped by tighter underwriting and more defensive policy terms. Until responsibility for building safety failures is more clearly allocated between designers, contractors, manufacturers and building owners, insurers will continue to price cautiously.
www.consortinsurance.co.uk
www.valcan.co.uk