Fire safety Issue for apartment towers will have insurance issues

Recently an article appeared in the Melbourne Age about the fire risk that some of the imported insulated panels being installed on high rise residential strata.  I would not be surprised if the material was on some commercial premises as well.

The article stated:

Removing and replacing combustible cladding in an average highrise building would be a logistical nightmare, and could cost millions of dollars, according to industry experts.

Victoria’s building regulator has announced every high-rise built in Melbourne’s CBD and inner suburbs in the past decade will be inspected for cheap, imported noncompliant cladding found to be flammable .

The Victorian Building Association’s audit of 170 buildings follows recent findings that noncompliant aluminium cladding imported from China fuelled the rapid spread of a major fire in a Lacrosse tower in Docklands last year.

But removing and replacing the cladding could be an expensive and lengthy process that would pose challenges for engineers.

There is also confusion over whether construction companies, developers or apartment owners are responsible for ensuring buildings with non-compliant cladding do not pose a significant fire risk.

Engineering experts say the cost of replacing cladding would vary, depending on the number of panels and their location.

Melbourne-based facade engineer Richard Drzewucki said cladding on a building’s facade would be difficult to access.

” When the building was built you had a nice tower crane helping you and all of a sudden you’ve got nothing,” Mr Drzewucki said .

One option would be to install scaffolding around the building’s exterior, which is not only timeconsuming but labour-intensive .

Further complicating matters, issues surrounding tenancy, traffic and equipment would need to be worked through.

David Fung from the engineering consultancy group AECOM said the potential problem was not restricted to Victoria, as aluminium composite cladding had been widely used around the country for decades.

‘ It is an issue that is going to have impacts across the rest of the country,’  he said.

The Fire Protection Association of Australia has warned the number of properties constructed with the non-compliant cladding could run into the tens of thousands.

The possibility of a class action in the case of the Lacrosse building has also raised questions about who will bear the cost of replacing the combustible cladding, with law firm Slater and Gordon representing about 150 owners and residents .

The firm’s Ben Hardwick said there was potential for claims worth millions of dollars to be lodged against Victorian builders for the cost of replacing noncompliant cladding.”

This of course is not the only problem with recent construction. I have seen some tests on some of the cables also imported from China by a Australian company and supplied and installed into commercial and residential buildings. Again the product looks okay and is 2/3rds the price but terrifyingly the insulation fails to meet Australian standards. I genuinely fear that it someone will perish in a fire caused by this cabling.

Besides the fire risk, there is a huge exposure for the electricians and builders who have installed the product. If you think the external panels is going to be difficult can you image what removing and installing large cables through out the building is going to cost. I know how this story is going to end. The importer will go into liquidation and the installers and or building owners, perhaps unit holders in a strata title will be left with the problem and the cost.

I hope the installers have not chosen cheap insurance as like all general insurance it is all about protection not the cost.

Sadly for those concerned faulty products is an exclusion in most property, construction and liability policies. Better quality policies have a write back for the resultant damage.  Few if any contractor is going to have a product guarantee policy while their product liability or combined general liability policy is not going to cover the replacement of the faulty cladding or wiring.

What a mess for the building owners, the tenants, the developers, and principle builder and all the  subcontractors involved.