Debate hots up on coverage for mass timber projects in Europe

A webinar will be held today by the Alliance for Sustainable Building Products (ASBP) and partners designed to push forward the debate on how to make mass timber construction projects more readily insurable. Mass timber is thick, compressed layers of wood that create strong, structural load-bearing elements that can be constructed into panellised components. It is regarded as one of the best ways of tackling the construction sector’s huge carbon footprint because the approach would significantly reduce the amount of concrete and steel needed. It is, however, being held back by a nervous insurance community about the risks associated with large construction projects based primarily on wood. Risk managers in the sector have told Commercial Risk during this year’s Risk Frontiers Europe survey that the limited number of carriers prepared to consider the risk are charging premiums four to five times the normal premium rate, with deductibles up to 20 times the normal level. Some argue that most insurers are taking a knee-jerk approach to mass timber without properly analysing and assessing the data and risks. Others say that the carriers are being naturally cautious in their approach to a new technology with scarce data available. The topic will again be discussed at this year’s Construction Risk Management Europe conference hosted by Commercial Risk in London on 7-8 June, and is likely to lead to a lively debate. The ASBP has attempted to move the debate forward through the publication of its Mass Timber Insurance Playbook, produced with the support of Marsh and Zurich, among others, and in partnership with the London Engineering Group. Ahead of the webinar to discuss the findings of the playbook, ASBP said the new guidance has been published to try to foster a more “collaborative” approach between construction teams and insurers to hopefully open the door to more “equitable” insurance for mass timber buildings. ASBP said that mass timber is strong and light, and, as a natural material, has aesthetic appeal. “But, especially since the Grenfell disaster, mass timber projects have sometimes faced difficulty securing insurance,” it said. “The Mass Timber Insurance Playbook is a direct response to the challenges developers have faced, providing guidance for all parties involved in arranging insurance – for both development and operation of projects,” explained the group. “The Playbook was written by insurance and building resilience specialists, to help stakeholders in the insurance and construction industries to understand each other’s priorities and language. The aim is to enable constructive communication, to help overcome gaps in understanding that sometimes hold back mass timber construction,” added the ASBP. Olly Booth, timber specialist and partner at property consultancy Gardiner Theobald and a partner in the project, said: “This new guidance is incredibly important. There has been a lack of understanding of how risks are mitigated by design and construction teams, which have been holding back mass timber construction. Mass timber has been on the back foot and insurance is by far the biggest thing making projects stall.” Co-author of the guidance, construction risk expert Jim Glockling said: “Insurance industry concerns are not kneejerk. They are genuine concerns that need addressing. The problem is that stakeholders each speak a very different language and not all stakeholders are engaged at the right time.” Playbook co-author Philip Callow of Mass Timber Risk Consulting added: “My research has made it very clear that communication is the key to progress. For the most part, trades are doing the right thing, but when communication fails that is almost always where the issues lie. There has absolutely been a disconnect in this area.” “The cladding crisis exposed the fact that understanding and regulation of fire risks in construction was not fit to be relied upon. This has made insurers wary about buildings with any combustible components. Simply complying with the regulation is not sufficient to give insurers comfort,” he said. *Our Construction Risk Management Europe event in London on 7-8 June will cover this topic in some depth. There is a presentation and panel discussion: New materials – new risks hosted by Tim Chapman, experienced civil engineer and underwriter and now chairman of the London Engineering Group. This is followed by a presentation by Barbara van Berkum, insurance manager at Netherlands-based construction group TBI Holdings, who will discuss the remarkable award-winning project SAWA in Rotterdam, the first 50m high circular timber residential building in the Netherlands, and related insurance challenges. To sign up for the event please visit https://events.commercialriskonline.com/CRM-Europe-23

Debate hots up on coverage for mass timber projects in Europe

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