From July this year, the closure of Wren Insurance Association marks a pivotal shift in how professional indemnity (PI) risk is managed across the construction sector. While the immediate impact falls on architects, the implications extend well beyond design practices affecting contractors, developers and the wider supply chain at a time when building safety and compliance remain under intense scrutiny.

Valcan, manufacturer of cladding systems, works with project teams navigating façade design, fire performance and regulatory change. In collaboration with Consort Insurance, and drawing on insight from Daniel White, we’ve explored what Wren’s closure means in practice, why it matters now, and how firms can respond more resiliently.

What’s changing and why is this happening now?

From 1 July, Wren Insurance Association will stop offering renewal terms to its 63 member practices. Existing policies will continue until expiry and claims already notified will still be handled. However, once those policies lapse, former members will need to secure cover in the open commercial professional indemnity market.

Since Grenfell, Wren has played a unique role, remaining one of the few insurers prepared to offer meaningful cover for claddingrelated exposure. Its exit therefore removes an important option for architects whose work involves façades, fire safety or residential buildings – all of which remain sensitive risk areas for insurers.

As Daniel explains, this point has been some time coming:

“Wren absorbed a high number of notifications relating to pre2019 work, claims many commercial insurers were reluctant to cover, and sadly that meant the exposure eventually became unsustainable. Wren asked members for additional funds beyond normal premiums to shore up reserves. Several practices decided the cost wasn’t worth it and signalled they would likely leave.”

He continues:

“A mutual needs enough members to spread risk and operate efficiently. Once departures reached a critical mass, Wren’s board concluded it could no longer offer competitive cover.”

Who is most affected – and who else should care?

When asked who feels the biggest impact, Daniel is clear:

“Architects, fundamentally. Wren was an architects’ mutual, so it never covered contractors. Its closure directly affects design practices, particularly those with fire safety or cladding exposure.”

However, he is clear that the implications extend further:

“Contractors aren’t immune here. They rely on their design consultants having adequate PI cover. If architects face narrower terms, higher excesses, or outright coverage gaps, that risk can ripple back through the supply chain – especially on design and build contracts where the contractor warrants the design.”

For planners and developers, this matters because insurance constraints can increasingly influence who can be appointed, on what scope, and at what stage risk becomes unmanageable.

Why cladding and façades remain under scrutiny

Insurers remain highly alert to risk in cladding and firerelated design. Highrise residential buildings, façade design, fire engineering services and remediation projects continue to attract the most intense underwriting scrutiny.

That does not mean insurance is unavailable, but it does mean insurers are selective. As Daniel confirms:

“Exclusions or sublimits for these areas have been more common when the insurance market hardened. As general market conditions have improved, insurers can provide cover if you can demonstrate product traceability, strict governance and compliance processes but the scrutiny is intense and generally reserved for bestofsector.”

This is where specification and system clarity become relevant beyond aesthetics or cost. At Valcan, we see how noncombustible systems, transparent testing data and clearly documented system performance can reduce ambiguity. From an insurer’s standpoint, ambiguity equals uncertainty and uncertainty is priced as risk.

What architects should be focusing on now

One clear message from Consort Insurance is that PI should now be treated as a strategic risk issue, not an annual administrative exercise.

As Daniel advises:

“Make sure the broker you select is competent in a complex professional indemnity placement. The market will be restricted, so the temptation might be to go to multiple brokers, but any more than two won’t give you the best outcome. Selecting one may seem counterintuitive but interviewing several and then appointing one from there could well deliver the best result this year.”

Policy wording also demands closer attention than it did under Wren. Commercial insurers are more inclined to apply exclusions, aggregation clauses and restrictive notification triggers. Runoff cover is particularly important, given that PI exposure can extend 12 years or more beyond project completion.

Contractual obligations should also be reviewed. Many appointments require insurance to be maintained “on no less onerous terms”. If exclusions widen, particularly around cladding, firms may find themselves technically in breach unless this is addressed proactively with clients.

What contractors should be reviewing

For contractors, simply confirming that consultants “have PI insurance” is no longer sufficient. The key question is whether that insurance responds to the services being provided.

Consultant appointments need to be genuinely backtoback. If a consultant’s PI now excludes façade or firerelated risk, contractors may be retaining liabilities they assumed had been passed down. Collateral warranties issued to funders and purchasers should also be reviewed in this context.

On higherrisk schemes, particularly residential towers or façadeheavy developments insurance constraints may increasingly influence procurement decisions. Insurance is now part of delivery risk, not just a compliance checkbox.

One piece of advice that matters most

Daniel White’s advice is simple: start early and seek specialist advice.

While the PI market is softening overall, with rate reductions of around 10–15% forecast for wellmanaged risks, that improvement is far from universal. Firms with cladding exposure, weak documentation or poor claims histories are unlikely to benefit.

As Daniel notes:

“The gap between good risks and difficult risks is widening. Specialist advice can make the difference between securing workable cover and facing exclusions that materially affect a firm’s ability to operate.”

The wider signal to the industry

Wren’s closure is a signal, not an anomaly. It reflects a broader recalibration of professional risk following Grenfell and ongoing regulatory reform.

Architects once supported by a bespoke, memberdriven mutual are now operating in a commercial market shaped by tighter underwriting and more defensive policy terms. Until responsibility for building safety failures is more clearly allocated between designers, contractors, manufacturers and building owners, insurers will continue to price cautiously.

For Valcan, and the project teams we work alongside, this reinforces the value of noncombustible systems, clearly warranted solutions and accountable design decisions. Grenfell’s legacy is not only regulatory; it is a fundamental shift in how design risk is understood, insured and managed across the industry.

For more information about Consort Insurance:
www.consortinsurance.co.uk

For more information about Valcan’s products and services:
www.valcan.co.uk