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As safe as houses? Modern methods of construction pose new risks

Published: 01/11/13

Zurich warns that some of the materials used in modern construction come with insurance risks that many are not aware of.

The growing prevalence of using modern methods of construction (MMC), such as timber frames, over more traditional techniques, such as with bricks or concrete blocks, to build properties quicker, cheaper and more efficiently has seen a substantial increase in the use of MMCs in the past decade or so.

But unlike many traditional building materials some, such as the new foam-like insulation materials, are combustible. Customers that are investing in these new materials, which make building projects cheaper and quicker, need to make sure they are aware of all possible risks before construction begins.

Range of uses

These new technologies are used in the construction of all manner of buildings from small blocks of flats to education, health and leisure centres, all the way up to the latest major construction projects in London.

With the UK construction industry currently enjoying a slight renaissance following the lean years of the financial crisis, there is a growing desire by many within the industry to use these materials that allow for a quicker and cheaper build. There is also a large amount of positive PR that can be gained from using eco-friendly materials in the construction of major projects.

MMC is a generic term for both off-site manufacturing and new site-based building techniques, and takes in a range of building processes such as modular construction, panelised systems and tunnel form methods that allow the casting of walls using concrete in one operation.

For instance, modular construction, where building sections are constructed as pods and then later stacked on to prepared foundations, is becoming increasingly popular – but they come with potential problems that aren’t always taken into account by construction customers.

“Modules or pods are built to quicken the build process,” said Jonathan Scotcher, Underwriting Manager for Real Estate at Zurich. “They are timber or metal and are put together in a factory with the plumbing and electrics pre-installed.

“While it’s an efficient process, there are concerns about how simple it is to repair any damage in the event of a flood. You’d have to replace the entire pod if it suffered major water damage, so there are problems right there.

“Also, if the pod is in a block of flats, it’s much harder to replace a pod at the bottom of the tower, than at the top.”

Assessing the danger

Zurich though is well versed in the level of risk assessment that needs to be considered with these new materials.

“We went to a number of manufacturers of these materials to understand what they make and what fire resistance they put into different projects on the market,” said Jonathan. “For example, cross-engineered laminated timber, which is built in Austria, is dry timber boards that are bonded and put under extreme pressure.

“From a fire resistance point of view, they are better than standard timber as they tend to char rather than burn. They are also more supportive, so you can build taller buildings with them as they have better structural integrity. However, they do tend to be more expensive than traditional timber.”

And when it comes to insurance cover for new buildings, it is essential to gather as much information as possible so that all viable risks are accounted for.

“For example, to the untrained eye a half-brick timber framed building can look like any other building,” said Jonathan. “But you wouldn’t know until you went inside that the walls are, in fact, plasterboard. The positives are that they’d be much warmer, but from an insurance point of view, it’s a massive consideration.”

Green cause

With the push for many UK properties to be as sustainable as possible, MMCs aren’t the only cause of concern for insurers.

Design features such as green roofs and walls also need to be taken into consideration.

“A green roof needs to be frequently watered,” said Jonathan. “If not, it dries out and becomes a fire risk. And if it’s overwatered, it could cause water damage. While they’re great at reducing a building’s CO2 levels, from an insurance standpoint we need to see both sides of the story.”

If construction customers are to avoid these design flaws, Zurich recommends a thorough risk assessment before construction even begins to ensure that properties are as solid as the foundations they are built on.

MMC risk and insurance considerations

  • Using lightweight and combustible materials may cause a greater degree of fire spread, leading to increased claims costs
  • Modular construction can cause hidden gaps that can lead to even a small incident causing a disproportionately high loss
  • Expensive delays can occur if a pod in situ needs to be removed, causing disruption and removal of surrounding pods
  • Increased risks of water damage and storm losses due to the materials used and the effects of wear and tear over time
  • Many MMC materials’ ability to withstand the effects of flooding is unknown in many cases
  • As many MMC systems are new and innovative, contractors may have no previous experience of the materials and assembly techniques required
  • Problems of obtaining replacement components in the future, especially if a particular manufacturer goes out of business


For construction trades insurance speak to Tony Cracroft on 0845 371 1452 or email tonycracroft@flintinsurance.co.uk



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