Why are insurers so concerned with sandwich panels?

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By Jack Durrant, BA (Hons), ACII > Panelling has been widely used in the construction of buildings for many years with the following advantages:

• Lightweight
• Sound is muffled
• Easy to use
• Easy to wash
• Low cost
• Commonly used throughout the UK.

Despite the obvious benefits, it’s important to understand what exactly the panel core is made from – and critically exactly when they were made. Panels in general, and especially panels manufactured prior to 2000 may contain combustible materials such as polystyrene or polyurethane. Any panel even those manufactured after 2000 could contain a combustible infill, the production and utilisation of such panels is much less common – it’s always worth checking if you’re not sure.

Now, let’s think about what this means for insurers and underwriters.

The building construction type is a material fact that customers and brokers should disclose to insurers. This ensures that the policy they buy is correct and has been suitably rated, so it can pay out in the event of a claim.

Underwriters will often assume a worst-case scenario to protect customers in the event that some information is unknown – this does a couple of things to benefit the buyer:-

1. Ensures that the policy will perform effectively in the event of a claim
2. Claims are not proportionally reduced due to undisclosed facts which would otherwise increase the premium.

The issue with most panelling – especially any installed prior to 2000 – is that insurers and customers will rarely know what the infill used in the panels is, and therefore will not know its combustibility level. If there is a significant building rebuild cost, with plenty of contents held, or heat works within a panelled building, then many underwriters would make the decision to decline to offer a quotation.

This is for a few reasons:

1. Their own reinsurance arrangements limit their capacity to insure these buildings
2. They do not want to inadvertently insure a combustible building and have claims refused on the basis they assume the panels are not combustible
3. Underwriters feel morally obligated to ensure that the building is safe to use and fit for purpose, thus protecting the inhabitants.

Most insurers look for Loss Prevention Certification Board (LPCB) approved panelling; most modern composite panels should meet these combustibility regulations. They also don’t want to conduct intrusive tests to determine the core of the panel because this will damage the structural integrity of the panel which then reduces its fire resistance. Composite panels are still difficult to identify, even with intrusive tests which damage the metal surround to get core samples of the infill.

The best advice for anyone thinking of buying or leasing a building with composite panelling would be to find out before moving in what the panelling is, and if it adheres to LPCB regs. Sometimes the original builders or inhabitants of the site will have the specs, so it’s worth checking. Another option is to have a surveyor try to identify the panels for you. It’s best to be prepared with the correct information, as insurers for the building will want to know what the panels are, and if they’re LPC approved.

For new building construction, if panels are used, it’s recommended that you get the spec sheet of the panels and keep these on record so you can show future insurers what the panels are made of. This paperwork will also be useful if you sell or lease the building in future. Furthermore, if you are involved with high hazard manufacturing, then a composite panelled building is probably not right for you. However, office premises should be fine due to the low fire hazard.

The bottom line is to always tell your broker if you think you might have composite panels in the building that you inhabit. Insurers will need to know this, and it certainly forms a key piece of underwriting rating criteria – which is vital in the event that you need to make a claim and need to prove your insurance valid and correct.

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