The RAAC crisis: Is it really back-to-school this September?
As all readers will know, many schools have been deemed "liable to collapse" following the historic widespread use of Reinforced Autoclaved Aerated Concrete (RAAC). Given a life span of around 30 years, RAAC has resulted in many public buildings from the 1950s to the 1990s being deemed to be structurally un-safe. This follows a spate of incidents, including one at a school in Kent in 2018, where RAAC panels failed without warning.
To remove RAAC, extensive works must be undertaken by specialists to remove ceilings, which very often also include asbestos. This has prompted the DfE to prepare contingency plans outlining the funding of remedial or rebuilding works. The government has also confirmed it will pay for all capital costs, including for temporary accommodation.
Presently, some schools have already closed or experienced disruption because of RAAC. However, more may follow suit as the National Audit Office reported that 14,000 schools potentially have RAAC. James Porter, a building consultant, stated that the actual number of schools with RAAC is likely to be considerably higher than those identified so far.
The full extent of the problem does not appear to be limited to schools. 24 hospitals in England have also been found to have RAAC-based construction, with seven of these not fit for purpose beyond 2030.
Considerations for insurers
Despite remedial work and capital costs being covered for public buildings, it is unknown how efficiently this will be undertaken and to what is deemed as a reasonable capital cost. As such, Insurers may expect to see an increase in claims for additional costs. Further, with RAAC potentially affecting many other types of buildings, it is unknown whether the government will finance remedial work and capital costs in a similar fashion. As such, Insurers may want to review their property wordings to assess their current exposure, and whether suitable reserves are in place.
Insurers may also wish to undertake independent assessments of RAAC in insured properties or properties that are proposed for cover. In addition to the potential first party losses, insurers are reminded of the increased risk of injury in the event of building failure caused by RAAC.
Further articles on RAAC:
Contents
- The Word, September 2023
- Mind the GAP - FCA warning to GAP insurers
- Death and disgrace policies: What can insurers learn from the allegations against Russell Brand?
- Extreme weather leading to a rise in property claims
- A new digital safe space – How does the EU Digital Services Act affect insurers?
- Insurance and the Automated and Electric Vehicles Act 2018
- CyberCube’s Global Threat Outlook: The evolving threat of cyber operations
- “TOBA traps” - general exposure risk under existing TOBAs
- Making numbers easy - complying with the Customer Understanding objective
Key contact
Tim Johnson
Partner
tim.johnson@brownejacobson.com
+44 (0)115 976 6557
You may be interested in...
Legal Update
Walking the fine line: The statutory duty of candour and insurance
Legal Update
FCA launches consultation on broker remuneration for multi-occupancy buildings insurance
Legal Update
AI is creating fraudulent claims
Legal Update
Shoplifting epidemic by organised criminal gangs: The impact for insurers
Legal Update
Death and disgrace policies: What can insurers learn about the allegations against Gregg Wallace?
Legal Update
Insurance complaints surge continues
Legal Update
The ‘grate’ cheese robbery: Implications for insurance professionals
Legal Update
Environmental crime and the impact for insurers
Legal Update
What might a Trump victory mean for the UK insurance industry?
Legal Update
Post Office scandal: Lessons for underwriters
Legal Update
Weather protection parametric insurance: A sign of things to come?
Legal Update
Updates to the UK’s Arbitration Bill
Legal Update
Ozempic: The rising costs and coverage issues of weight loss medication
Legal Update
ICAEW: Changes to PII requirements
Legal Update
Contractor insolvency: Peabody Trust v NHBC
Legal Update
By a narrow 2 to 1 majority, the Court of Appeal finds in favour of insurers in the construction of an exclusion clause in a W&I policy
Legal Update
Smooth sailing ahead: The LMA's new Open Form Default Clause
Legal Update
LMA binders’ consultation
Legal Update
PFAS: The issue that won’t go away
Legal Update
Oklahoma earthquake: Racial discrimination in adjudication
Legal Update
Vicarious liability for kinship foster carer abuse: Implications for local authority insurers
Legal Update
Latest short-term insurance trends
Legal Update - The Word
The Word, August 2024
Legal Update
Words matter: Another case on the importance of accurate drafting
Legal Update
London Fire Brigade to stop attending for automatic fire alarms: Implications for insurers
Legal Update
Navigating Oil Price Cap legislation: LMA issues revised Cargo and Hull wordings
Legal Update
It’s not cricket: Insurers change their mind about jurisdiction
Legal Update
Multi-occupancy building insurance: Latest tribunal decision
Legal Update - The Word
The Word, June 2024
Legal Update - Consumer Duty
Updated UK Consumer Wordings Guidance: Browne Jacobson collaborates with the LMA
Legal Update - Consumer Duty
From products to protection: The rise of embedded insurance
Legal Update
The European Accessibility Act: Inclusive products and services
Legal Update
Final FCA anti-greenwashing rule guidance published
Legal Update - The Word
The Word, May 2024
Legal Update
The Baltimore bridge collapse: One of the biggest losses in maritime insurance history?
Legal Update
The space data revolution
Legal Update
New guidance on supporting autistic customers for the insurance industry
Legal Update
Chubb ordered to indemnify SXSW for Covid cancellation
Legal Update - The Word
The Word, March 2024
