Beware of claims in the pipeline – construction trade associations warn of pre-insulated pipework fire risks

The fire resistance of buildings is being compromised by a “fundamental change” in the way pre-insulated pipework is used.

This warning appeared in a joint statement issued by the Building Engineering Services Association and the Thermal Insulation Contractors Association in July 2022.

The joint statement

Pre-insulated pipework typically comprises flexible polyurethane (PUR) or polyethylene (PE) insulation fitted around a pipe. This type of pipework has historically been used in underground systems, but the statement notes that “there appears to be a growth market for pre-insulated pipework installations inside of buildings also. This is a fundamental change in product application…”.

It goes on to caution that using pre-insulated pipework in this way poses several risks, and “given the current focus on fire safety in buildings, the two organisations want to draw attention to the issue”.

The following problems are identified in the joint statement:

Reduced fire resistance – pre-fitted insulation may be thinner than specified, and PUR and PE materials may fall outside usual fire performance specifications.
Reduced thermal resistance – building specifications typically reflect the requirements of British Standard 5422 (BS 5422), but pre-insulated pipework does not usually meet those performance criteria.
Flexible PE-insulated piping systems are being installed in buildings that are already deemed high-risk, such as large multi-residential buildings.

Manufacturers, distributors and installers are responsible for demonstrating the suitability of pipework for specific applications.

The legal framework

Euroclass is a common standard for assessing the fire resistance of building materials and classifying them from A1 (non-combustible) to F (easily flammable). There is no general requirement for a party to specify or use products with a particular Euroclass classification or to comply with British Standards.

However:

The Building Safety Act 2022 (the 2022 Act) introduces new causes of action in relation to buildings and construction products. It does not make specific provision for pre-insulated pipework, but it brings Section 38 of the Building Act 1984 into force, allowing statutory claims for damages in respect of buildings which breach the Building Regulations 2010.
Approved Document L provides government guidance for meeting the energy performance requirements in the Building Regulations, and expressly adopts the requirements of BS 5422 for dwellings. Proving that a residential building is compliant with Building Regulations will be difficult where pre-insulated pipework is used indoors, as it is unlikely to comply with BS 5422.
In any event, specifications for individual projects may require compliance with British Standards or impose higher quality standards, especially regarding fire resistance.

Implications for the construction industry

Contractors, architects, engineers and others providing advice, designs, specifications or inspections in relation to indoor pre-insulated pipework are vulnerable to claims. They may be liable to compensate other parties, and may be required to redo work already undertaken if the work undertaken is considered defective, in breach of contractual requirements or of quality standards.

Ongoing and completed contracts should be considered in order to identify those where they may be liable for:

Breaches of contractual specifications and/or 'fitness for purpose’ obligations.
Non-compliance with Building Regulations.
Breaches of reasonable skill and care obligations.

Project parties should:

Undertake an audit of projects to identify their exposure.
Ensure best practice is followed on current and future projects.
Seek further product information where necessary.
Notify insurers of claims and potential claims as soon as possible.

Implications for the supply chain

Manufacturers, suppliers and installers should be prepared to supply:

Current Euroclass fire test certificates.
Details of the extent of exposure of insulants to heat and flame during testing; i.e. how the Euroclass fire rating was achieved.
Clear evidence of product compliance with BS 5422.

Insurance implications

Some policy wordings will already limit or exclude cover for claims in relation to fire safety risks. Depending on the precise words used, pre-insulated pipework claims unrelated to façade materials may still be covered.

Additionally, property and professional indemnity insurers should:

Review the information they currently seek prior to placement and renewal, and consider whether they need to request more detailed information regarding pre-insulated products as part of the underwriting process.
Check existing wordings and consider imposing increased excesses, restrictions or exclusions of cover in new and renewed policies.
Consider introducing aggregated cover limits to control their claims exposure.

Comment

The joint statement issued by the Building Engineering Services Association and the Thermal Insulation Contractors Association provides practical advice to the construction industry. It remains to be seen whether pre-insulated pipework is designated a "safety-critical product" under the 2022 Act in due course. Nevertheless, it should only be used in buildings where its suitability for that purpose can be evidenced. With a greater emphasis on fire safety following the Grenfell Tower tragedy, all those involved in the provision of pre-insulated pipework and its use in buildings must ensure that quality standards are met.

Where compliance with standards cannot be evidenced, there is a real risk of claims being made across project teams and along the supply chain. Suppliers who do not ensure their products are correctly marketed and free from defects risk claims brought under Section 148 of the 2022 Act, as well as on more established bases.

Policyholders should check their contracts, consider their risk of claims, and ensure they make notifications promptly. Insurers should review their exposures to claims in this area, and ensure the wordings of new and renewed policies reflect their risk appetites.

Read other items in Professions and Financial Lines Brief – October 2022