Cladding and commercial property insurance: What property owners need to know

The challenge

If you own a building which has cladding, it could affect your insurance options, cover and costs. Since the Grenfell Tower tragedy in 2017, insurers have taken a much closer look at building safety, particularly the materials used in external wall systems.

As a result, property owners may face higher premiums, fewer insurance options and more detailed questions from insurers.

Why cladding matters to insurers

Some cladding materials are considered a higher fire risk. If insurers aren’t certain what materials have been used, or if remediation work is still outstanding, they may see the property as a greater risk.

This can mean fewer insurers willing to quote, more detailed underwriting scrutiny and, in many cases, higher premiums. Even where remediation works are planned, the risk may continue to influence the insurance outcome until the works are completed, documented and certified.

How cladding can affect your insurance cover

If your property has cladding, or if the construction details are incomplete, you may find that the insurance conversation becomes more complex:

1. Reduced availability of cover

Some insurers have stepped away from higher-risk buildings, particularly where there is uncertainty around height, occupancy, construction materials or External Wall System status. This can make renewal more challenging and reduce competition in the market.

2. Increased Policy Restrictions

Where cover is available, it may come with higher fire excesses, tighter conditions, sub-limits or exclusions relating to certain materials or fire spread. These details matter. A policy that looks suitable at first glance may not respond in the way you expect if a claim occurs.

3. Enhanced Disclosure Requirements

Insurers now expect detailed, accurate information about construction, cladding type, fire risk assessments, EWS1 forms where applicable, and any interim or planned remediation works. Providing complete information is essential, as gaps or inaccuracies can affect both placement and claims outcomes.

The key is to understand the risks you are exposed to and make sure your insurance arrangements are built around the reality of your property, not assumptions made at the last renewal

Why commercial property insurance premiums can rise

Premium increases have been one of the most visible consequences of cladding risk, with reasons including:

• Perceived fire risk associated with combustible materials
• Rising reinsurance costs
• Market capacity constraints
• Uncertainty around remediation timelines

For some affected buildings, premiums have increased several-fold compared with pre-2017 levels.

While the market has shown signs of stabilisation in certain segments, buildings with unresolved cladding issues continue to face elevated pricing and limited competition when it comes to insurance cover.

What can property owners do now?

Understanding the risks you are exposed to is key to making the right decisions with your insurance arrangements. If your property is affected by cladding, there are practical steps you can take to support your renewal and help insurers build confidence in the risk.

• Commission up-to-date fire risk assessments.
• Obtain and maintain EWS1 certification where required.
• Keep clear records of interim measures, remediation plans and timelines.
• Review fire detection, alarm and suppression systems.
• Engage with your insurance adviser well ahead of renewal.

The more clearly you can evidence the risk, the controls and the plan, the stronger your position is likely to be when approaching the insurance market.

Why planning ahead matters when it comes to property insurance

Leaving your insurance renewal until the last minute can limit your options. Starting discussions early gives your adviser time to present your property risks to insurers and explore the most suitable solutions.

It’s also a good opportunity to review whether your buildings are insured for the correct reinstatement value and whether your overall insurance programme still meets your needs.

How Partners& can help

Our commercial property specialists help property owners navigate the challenges of cladding, building safety and insurance placement.

We work in partnership with our clients to help navigate complex risks, engage with insurers, present robust underwriting information and design insurance programmes that support greater certainty.

Let’s Talk

If cladding is affecting your property insurance arrangements, or you would like support ahead of your next renewal, speak to the Partners& commercial property team.