Status	2026 Risk & Market Reality Analysis
Regulator	Building Safety Regulator (BSR) / Single Construction Regulator (SCR)
Applicability	London Higher-Risk Buildings (HRBs) – Developers, Contractors, Designers & Dutyholders
Compliance Window	Active (Insurance Capacity Constrained)

 

In 2026, the biggest risk on London HRBs is no longer whether something is insurable — but when it becomes uninsurable.

Insurance, indemnity and risk transfer on London Higher-Risk Buildings (HRBs) have entered a new phase. The regulatory environment created by the Building Safety Act, combined with the emergence of the Single Construction Regulator (SCR), has fundamentally altered how insurers assess exposure — and how much risk they are willing to carry.

In practice, insurers are no longer pricing “construction risk” in isolation. They are pricing governance, competence, evidence quality and regulatory compliance. Where those are weak, risk increasingly becomes uninsurable rather than expensive.

This shift is now visible at key regulatory choke points, particularly Gateway 3 and occupation readiness, where unresolved risk does not simply delay approval — it undermines insurance certainty.

1. Why insurers are retreating from HRB risk

Insurers are reacting to three structural changes in the London HRB landscape:

• Extended liability horizons: longer limitation periods and retrospective scrutiny.
• Regulatory enforcement clarity: regulators can now identify who decided, approved and installed.
• Evidence-driven accountability: poor records are no longer defensible.

The Golden Thread and Gateway regime mean that liability is easier to trace. That directly affects insurers’ willingness to underwrite risks where operational readiness and evidence usability are weak.

2. The shrinking value of traditional indemnities

Contractual indemnities are increasingly failing to deliver meaningful protection. In many HRB scenarios, indemnities exist on paper but collapse in practice because:

• The indemnifying party has no effective insurance backing.
• The risk arises from regulatory breach rather than pure negligence.
• Multiple parties share decision-making responsibility.

This is particularly acute where product decisions are involved. As explained in how the SCR changes product liability for contractors and designers, responsibility now follows control and approval — not contractual position alone.

Where risk cannot be cleanly transferred, insurers price it conservatively — or exclude it entirely.

3. What is becoming uninsurable in 2026

Across London HRBs, certain categories of risk are increasingly excluded, capped or declined:

• Fire safety non-compliance: particularly façade systems and compartmentation failures.
• Uncontrolled substitutions: changes that invalidate tested systems.
• Legacy structure uncertainty: where investigation evidence is incomplete.
• Regulatory breach exposure: fines, enforcement action and remediation orders.

Façade-related exposure is a consistent flashpoint, as detailed in Façade Strategy, Fire Performance and Liability Exposure in London HRBs. Where the installed façade cannot be proven to match the approved system, insurers increasingly step away.

Similarly, unresolved uncertainty around existing structures undermines insurability, linking directly to structural investigation expectations for legacy concrete frames.

4. Gateway 3: where insurance and regulation collide

Gateway 3 is now a convergence point for regulatory approval, insurance comfort and funder confidence. Where Gateway 3 approval is delayed or conditional, insurers increasingly:

• Restrict cover pending resolution.
• Apply exclusions for known issues.
• Refuse to bind policies until approval is secured.

This is why failures at completion, as explored in Completion Certificates and Gateway 3: Where London Projects Are Failing, have direct commercial consequences beyond programme delay.

5. Dutyholders and the personalisation of risk

Another material shift is the increasing personalisation of risk. Insurers are paying closer attention to named dutyholders, competence evidence and governance structures.

Weak control arrangements, poor documentation or unmanaged change can now affect not just project insurance, but also professional indemnity availability for individuals. This links directly to competence expectations for Principal Designers and Principal Contractors.

6. A practical risk-reduction checklist for 2026

Design & specification

✔ Products specified as tested systems, not isolated components.
✔ Fire and structural assumptions evidence-led and documented.

Construction control

✔ Substitutions formally assessed and approved.
✔ Installation evidence captured and traceable.
✔ Control plans aligned with Gateway commitments.

Evidence & Golden Thread

✔ As-built records accurate, complete and usable.
✔ Decisions attributable to named individuals.

Completion & occupation

✔ Gateway 3 readiness planned early.
✔ No reliance on temporary or unresolved safety measures at occupation.

Key takeaway

In 2026 London HRBs, insurance is no longer a safety net for unmanaged risk. Where governance, evidence and regulatory compliance are strong, insurance remains available. Where they are weak, risk increasingly becomes uninsurable. The projects that succeed treat insurance as a consequence of control — not a substitute for it.

image: constructionmagazine.uk

Expert Verification & Authorship: Mihai Chelmus Founder, London Construction Magazine | Construction Testing & Investigation Specialist