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'Bigger threat to business than Covid' - property owners face insurance crisis over cladding widely used in homes and buildings

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Insurers have been cautious since the Grenfell Tower disaster. Photo: Natalie Oxford/PA

Insurers have been cautious since the Grenfell Tower disaster. Photo: Natalie Oxford/PA

Insurers have been cautious since the Grenfell Tower disaster. Photo: Natalie Oxford/PA

Ireland is facing a new insurance crisis as property owners struggle to get cover for a type of cladding widely used in homes and buildings across the country.

Commercial property owners are being refused insurance by a number of underwriters due to part of the properties’ external wall structure containing products such as polystyrene.

This is despite such products being safety approved when used correctly in buildings up to 18 metres high.

Insurance sources said the Grenfell Tower disaster in England, where 72 people lost their lives after a 24-storey apartment block went up in flames, is a factor behind this.

However, business owners have accused insurers of using this as a “cop-out”.

Hotelier Michael Lennon, former president of the Irish Hotels Federation, slammed insurance companies for refusing to cover businesses already struggling due to the pandemic.

“Insurance companies are a law unto themselves,” he told the Irish Independent.

“Engineers and fire officers have looked at this type of insulation and it’s all above board.

“It isn’t similar to Grenfell at all, but insurance companies are looking at Grenfell and it obviously put the fear of God into them,” Mr Lennon told the Irish Independent.

“It’s going to create a serious problem. We are only at the tip of the iceberg with it at the moment.

“This is going to cost businesses quite substantial money if they have to remove cladding to get cover.

"in some cases it could be 10pc of their business.

“The same insulation is in the blocks of every house in the country.

“It’s bad enough they won’t pay out for business interruption, now they’re refusing to cover a certified system”.

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One business owner, who wishes to remain anonymous, received a quote 15 times the normal cost for only 50pc cover, along with an “unworkable” huge excess amount.

“My business cannot sustain such draconian costs and it is a bigger business threat than Covid at the moment,” he told the Irish Independent.

“The type of cladding used is a well recognised system which is completely different to the one involved in Grenfell.”

Since the tragic event at Grenfell Tower, the potential presence of combustible cladding and insulation materials in buildings has been a concern for property owners.

Reports into the Grenfell disaster found there were no fire barriers in the air cavity behind the cladding.

While polystyrene is combustible, it has fire retardant qualities once affixed to buildings in the proper manner.

The insulation material is usually directly attached to a solid wall of a building and is covered with a cement render to provide protection.

It is understood a number of property owners have written to the Central Bank and Finance Minister Paschal Donohoe about the issue.

Peter Boland, director of campaign group the Alliance for Insurance Reform, said this appears to be a problem in other countries since Grenfell.

However, he said the issue has been “amplified in Ireland by the huge level of damages we pay out relative to anywhere else in Europe and the absolute duty of care we often impose on occupiers and indeed anyone involved in a building”.

“If we do not address these issues soon, many sectors will not be in a position to recover from Covid-19 because they will be uninsurable,” Mr Boland added.

A spokesperson for the National Standards Authority of Ireland (NSAI) said this type of external cladding is “widely used” in homes and properties across Ireland, Europe and America.

Insurance Ireland said it would be difficult to comment without having greater detail of the individual instances involved.


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