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Managing insurance risk in high-rise developments

At a glance

  • More innovative tall buildings are being erected in the UK using more sustainable construction methods and having improved energy performance, but sometimes, important insurance considerations are being overlooked
  • Fire risks may be increasing with the use of combustible modern construction materials and methods
  • Zurich can offer risk management guidance on combustible materials

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By reading this article, and correctly answering the three questions underneath, you will have achieved the following learning outcome: Describe some of the key risks associated with Modern Methods of Construction.

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With property prices at an all-time high in some areas of the UK, developers are looking skyward in a bid to keep up with rising demand.

And with new modern methods of construction emerging all the time, many offering cost and time savings during construction, those designing these new high-rise buildings are left with a lot of scope as to how to solve certain technical and design problems.

But as the drive towards more sustainable, energy-efficient construction gathers pace, risks, especially around fire, may be increasing.

A study published earlier this year by New London Architecture found that nearly 250 skyscrapers of all shapes and sizes are currently either proposed, approved or under construction in London. And it is not just London that is set to see its skyline change forever, with an increase in tall buildings also planned for the rest of the UK.

“The pace of build and style of some of these new high-rise developments is pushing the boundaries of our knowledge in terms of risk management,” says Brian Green, Risk Engineer at Zurich.


“National building regulations and design codes don’t always cater for buildings of the size and complexity we are now seeing proposed.Developers are trying to push boundaries all the time. Mixed occupancy developments, combining, for example, retail, office space, residential and hotel accommodation within the same building are increasingly common. Each of these occupancy types has its own requirements and brings its own challenges in managing risk.“Zurich supports progress and development, but there needs to be a degree of measure about it.”

Life safety versus property protection

Buildings are primarily designed to satisfy national Building Regulations, which are aimed at ensuring the safety of occupants and making sure there are suitable means of escape. If there is a fire, what happens after the building has been evacuated is very often ignored – it is left to the building owner and their insurer to pick up the pieces. Tenants may simply relocate elsewhere and never return. Assuming the building can be repaired or rebuilt, increased costs will then be incurred in finding new tenants.

“Using combustible materials can not only increase fire risks but also add to long-term insurance costs,” says Brian. “And if something becomes difficult or expensive to insure, it may well also impact on its market value should a property owner want to sell it in the future.”

Modern construction methods, such as timber-framed buildings, modular construction and ‘green’ insulation materials used in cladding systems, which are often combustible, are becoming more commonplace in high-rise designs to reduce costs and satisfy energy performance. However more joined-up thinking is required on the use of some of these materials, especially in tandem with each other, as many pose additional fire risks.

Fire engineered solutions, which use active fire suppression systems to reduce internal compartmentation, can also increase the risk as they rely on the active systems to always be in service and to operate exactly as planned if the emergency occurs – experience demonstrates this is not always the case.

Using combustible materials can not only increase fire risks but also add long-term insurance costs. And if something becomes difficult or expensive to insure, it may well also impact on its market value should a property owner want to sell it in the future

Brian Green, Risk Engineer at Zurich

“High rise buildings, which have a large number of individual tenants, are far more likely to have building alterations and refurbishment works taking place at any given time. Fire protection systems are typically taken out of service temporarily to allow these works to take place, leaving these floors unprotected at a time when the building is potentially at its most vulnerable. This can be a major concern if the works are not safely managed,” cautions Brian.

Classifying potential risks

Zurich classes a high-rise building as one that is over 23 metres in height, which is the accepted level most fire brigades can reach externally. Above this, the only way to deal with a fire is to go into a building, which is far more complicated and dangerous.

“As buildings become taller and more complex in their operation, any problem which occurs, such as a fire, potentially becomes that much more serious and more complex to deal with” says Brian

“However, thankfully the majority of tall buildings are well designed and constructed – and are perfectly safe – although for some we have had to decline insurance where we have not been happy with the designs.”

Zurich, though, is always happy to talk through any potential property risks with brokers and their customers and how we may be able to help.

Image © Getty

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