Article by BLG’s Professional Liability and Commercial Litigation Team

As the first professional indemnity insurance scheme to provide cover to the emerging asbestos inspectors market is launched, providing cover for companies accredited under NIACS, we take a look at the scheme.

Regulation 4 of the Control of Asbestos at Work Regulations 2002, which came into force on 21 May 2004, requires UK commercial property owners and managers classed as "dutyholders" to assess whether asbestos is present in commercial premises, and if so, to ensure its safe management.

It is estimated that it will cost in the region of £1.4 billion to survey the estimated 800,000 buildings in need of assessment. The burden on the dutyholders is therefore heavy. The required assessment work is clearly of a potentially hazardous nature, and requires the involvement of specialist asbestos inspectors. One would have thought, given the demand for their services stimulated by the legislation, that asbestos inspectors were set up for a period of very brisk and lucrative business.

Surveyors attempting to enter the asbestos inspection market have not found the going entirely straightforward. The main stumbling block encountered has been in relation to insurance:

  • The Royal Institute of Chartered Surveyors’ ("RICS") minimum policy wording requirements include restricted cover for asbestos liabilities, and surveyors undertaking asbestos inspection work, which is outside their professional capacity, will fall outside the limited scope.
  • More generally, given the record losses endured in recent years, reinsurers and insurers have been reluctant to provide professional liability cover for persons involved in asbestos-related work. To address these difficulties, RICS, in conjunction with the Asbestos Removal Contractors Association, has established "NIACS" (the National Individual Asbestos Certification Scheme). It is open to all construction professionals and is the only register of UKAS accredited asbestos inspectors.

NIACS registered asbestos inspectors-to-be have to take part in training sessions run by the Royal Society for the Promotion of Health and sit tests to obtain a Level 3 Certificate in Asbestos Inspection Procedures. Armed with this certificate, they can then apply for NIACS membership which is granted after the applicant has built up a sufficient level of supervised work experience, visited the Construction Industry Training Board’s ("CITB") construction skills training centre in Norfolk, and received a CITB competency certificate, which lasts for three years. CITB is a UKAS accredited certification body.

NIACS registered inspectors are required to work to a set of standard terms and conditions of engagement. Their work is subject to ongoing surveillance. The surveillance will include technical assessment of asbestos inspection reports which have been produced by the inspector, assessment of the inspector undertaking a survey, and a short examination at the mid point of the three year life of the CITB competency certificate.

Professional indemnity insurance specific to asbestos inspection work conducted on NIACS standard terms and conditions has been arranged and is available to NIACS registered inspectors. It provides cover for the principal types of liability that may arise as a result of asbestos surveying activities, including cover for:

  • negligently failing to identify asbestos which subsequently causes bodily injuries;
  • consequential losses resulting from inspectors’ negligence, e.g. lost profits resulting from building closures caused by failure to identify asbestos; and
  • diminution in the value of premises due to the discovery of asbestos in premises which has not been identified during an assessment owing to the inspector’s negligence.

Many surveyors will be cautious about entering what is widely regarded as a risky business. However, with professional indemnity insurance for asbestos inspectors now a reality for NIACS registered inspectors, RICS is predicting that up to 2,000 members will become registered under NIACS within the next three years in response to high market demands from dutyholders for the obligatory asbestos assessments.