Architects face more cautious underwriting following withdrawal of PII firm Wren, lawyers warn

Architects face “immediate uncertainty” following the withdrawal of a major insurance provider from the market, a construction law firm has warned.

Trowers & Hamlins said practices could be landed with more cautious underwriting, exclusions and narrower protections on projects as a result of the Wren Insurance Association’s decision to pull the plug on underwriting new insurance business.

Wren has been one of the only insurers providing meaningful professional indemnity insurance (PII) cover for cladding since the 2017 Grenfell fire, which resulted in a drastic increase in the volume of claims relating to cladding and fire risks.

But in a statement last week, the mutual said it was conducting a solvent exit from the market which will see it continue to meet its liabilities but stop all offers for renewal terms from 1 July this year.

The member-owned firm said it had made the “difficult decision” due to a high number of claims related to cladding, mostly involving work dating before 2019, which had made it necessary to increase calls on its members. It added that a significant number of members had decided to leave the Wren following a supplementary call in March last year, meaning the business now lacks the necessary size to offer competitive insurance cover.

Trowers & Hamlins senior associate Edward Henley said Wren’s withdrawal means many practices will encounter insurer-imposed terms for the first time, instead of the “bespoke, member driven structure Wren offered”.

He also warned of the implications for clients appointing architects, including the risk of limitations on cover for higher risk work and changes in policy wording.

Henley is among several insurance and built environment experts who have made warnings about the impact of Wren’s withdrawal over the past week.

Former Wren director of risk Management Margaret Wright said the firm’s solvent exit was “not good news for architects generally,” adding: “Wren quietly did good work for the profession in the background. Simply put it was more than an PI insurer.”

Former head of fabric at Barclays’ ASS Facility Services Paul Garner said it represented a “systemic failure surfacing”.

“Years of unclear regulation, shifting guidance, and inconsistent building control around cladding have created a perfect storm of retrospective liability. Insurers are now reacting to that uncertainty and exiting,” Garner said.

“Blaming government alone is too simplistic. But it’s hard to ignore that a lack of early clarity and enforceable standards has pushed disproportionate risk onto designers and their insurers. Until risk is more fairly allocated and regulatory certainty improves, capacity will keep shrinking and the whole supply chain will feel it.”