For those in the insurance industry, it will come as no surprise that cavity wall insulation compensation claims are fast becoming the replacement for the prevailing PPI claims.  With daily media scare stories, the insurance industry faces huge losses as claims for mis-sold cavity wall insulation are increasing on a monthly basis. The majority of cavity wall insulation was sold by ‘door steppers’:- door-to-door canvassers pushing the low cost (free to some) installation.

Bespoke Risk Solutions (‘BRS’) is a leading specialist insurance broker that has been approached by a number of solicitors looking for help in setting up an ATE facility. This will help unhappy households get compensation, which in most cases will provide the funds for the poor workmanship to be rectified; making the property safe,dry and secure for the family.

For solicitors and legal advisors, this article gives important background information, on the increasing number of claims arising from cavity wall insulation. 

Cavity wall insulation – backed by the Government

With the need to reduce carbon emissions, there have been plenty of government initiatives that offered homeowners the chance to improve home energy efficiency.   Cavity wall insulation is one of these.  A simple concept: insulate the cavity between the inner and outer brick walls of the property with polyurethane foam and save on heating costs.

The National Insulation Association (‘NIA’) estimates that 33% of a property’s heat is lost through the walls and as most modern homes in the UK are built with cavity walls, the potential for insulation (and energy saving) is huge.   It is claimed by the NIA*that a well-insulated loft can save as much as £150 on fuel bills over a year, whilst cavity wall insulation can save a further £150 in the same period for an average sized house.

The space between an inner and an outer wall is designed to stop rainwater reaching the inside of the property. These cavities also allow heat to escape and by filling the gap between these two layers, it is possible to prevent heat from escaping.  Cavity wall insulation is normally installed by drilling a small hole in the property’s outer wall.  A pump is then used to fill the gaps with a polyurethane insulating foam. In theory, it sounds simple but due, in some cases, to poor workmanship or unsuitable installation, problems can arise. 

How things went wrong

According to research by the consumer publication ‘Which’**, damp could occur in properties because of cavity wall insulation if there is a combination of these factors:

• The home is exposed to severe levels of wind-driven rain
• The home is located in an unsheltered position, e.g. not protected by trees or other buildings
• The external walls are poorly built or maintained with, for example, cracks in the brickwork or rendering.

Despite there being an industry-funded guarantee organisation named Cavity Insulation Guarantee Agency (CIGA), many cavity wall insulation contractors, installers and providers will have ceased trading by the time that claims arise.  Original contracts would have been between the installers and the homeowners and by definition relatively simple to prove contractual obligations.  When the insulation was installed, a guarantee would usually have been issued by CIGA.

Another associated area that legal advisors may be involved in, is the potential for personal injury claims arising as unintended consequences of the cavity wall insulation.

For example, respiratory conditions can develop, or existing conditions can be worsened as a result of dampness (according to NHS Direct) and some potential claims could include the following conditions:

• Fungal infections
• Sickness and vomiting
• Shortness of breath
• Bronchitis and Asthma
• Sinusitis
• Infections

There is an opportunity for the legal sector to assist in claims from affected parties (those mis-sold cavity wall insulation or those with resulting problems).  Cavity wall insulation contractors need insurance to protect them against the possibility of legal action being taken against them in respect of their legal responsibility for personal injury or property damage.

Claims in respect of these liabilities can be expensive to defend.  Cavity wall insulation contractors’ liability insurance can protect against these losses.

We are interested from hearing from any legal adviser working in this sector to explore business opportunities in what could become the next generation PPI.

Please contact me on 01702 200222

or email [email protected]

Peter Collins

Director

Bespoke Risk Solutions Ltd.

*https://www.nia-uk.org/consumer/news/big-energy-saving-week-2016/

**https://www.which.co.uk/reviews/insulation/article/cavity-wall-insulation/cavity-wall-insulation-damp-problems

Bespoke Risk Solutions Limited are an Appointed Representative of Leisureworld (GB) Ltd who are authorised and regulated by the Financial Conduct Authority (Financial Services Register No. 749920) You can check these details by visiting www.fca.org.uk

Bespoke Risk Solutions Ltd are registered in England and Wales No. 07292153.  Registered office:  Victoria House, 50 Alexandra Street, Southend-On-Sea, England, SS1 1BN

Leisureworld (GB) Ltd are registered in England & Wales No. 02663024.  Registered office: 1422/24 London Road, Leigh On Sea, Essex, SS9 2UL.