Consider a mid-sized M&E consultancy in the Midlands that, in early 2024, took on a 14-storey residential-led mixed-use scheme as part of a wider design team led by an architect-principal designer. The building plainly fell within the higher-risk building cohort: above 18 metres, residential occupancy, multiple dwellings. The consultancy’s appointment, drafted before the gateway regime had bedded in, treated Building Safety Act dutyholder obligations in a single short paragraph. Twelve months later, with the project paused at Gateway 2 while the Building Safety Regulator queried the smoke control strategy and the means of escape from the upper levels, the consultancy received its first formal letter from the developer’s solicitors warning of potential claims for programme costs. The firm’s PI broker, called in at short notice, found that the policy renewed the previous October contained a fire-safety exclusion that the firm’s directors had not closely read.
That sequence — broad statutory exposure, narrow contractual definition, undefended policy exclusion — captures much of what has changed for M&E consultancies since the Building Safety Act 2022 received Royal Assent. This article looks at the regime in practical detail and at what it means for professional indemnity placement. It assumes familiarity with the basic PI principles set out in our pillar article on PI for building services consultants.
The shape of the new regime
The Building Safety Act 2022 introduced a layered framework whose effect on M&E consultancies is felt mainly through four channels: the gateway regime, the dutyholder roles, the competence and golden-thread requirements, and the changes to limitation through amendments to the Defective Premises Act 1972.
The gateway regime applies to higher-risk buildings, defined for the purposes of building control as buildings of at least 18 metres in height or seven storeys, containing at least two residential units. Gateway 1 sits at planning stage and requires fire-safety considerations to be embedded in the planning application. Gateway 2 sits before construction begins and requires Building Safety Regulator approval of the detailed design; it is the gateway that most directly affects M&E consultancies, because it requires comprehensive design information including, in practice, fully developed services strategies for smoke ventilation, evacuation, firefighting facilities, electrical safety and water hygiene. Gateway 3 sits before occupation and requires evidence that the building has been constructed in accordance with the approved design and the golden thread of information.
The dutyholder roles introduced under Part 2A of the Building Regulations broadly mirror those under CDM 2015 but are not identical. The client, the principal designer (for building regulations purposes) and the principal contractor each have statutory obligations relating to competence, coordination and compliance with the regulations. The Building Safety Act principal designer role is distinct from the CDM principal designer role, although the same entity often takes both. Where an M&E consultancy is appointed as principal designer on an HRB — a less common arrangement than architects holding the role, but one that does occur — the firm assumes leadership of design compliance and coordination obligations whose breach can expose it both contractually and via the regulator.
The competence and golden-thread requirements have shifted the practical operation of design teams. CIBSE has published guidance on competence for building services engineers, and the British Standards Institution has developed PAS 8671 and related documents that articulate competence expectations. The golden thread requires structured digital information to be maintained throughout design, construction and operation of HRBs, in a form that is accessible, accurate and up to date. For an M&E consultancy this means investment in BIM workflows, information management protocols and document control that goes beyond what most firms had in place before 2022.
The most consequential change for PI purposes, however, is the amendment to the Defective Premises Act 1972. Section 1 of that Act gives anyone who acquires an interest in a dwelling a right of action against those who took on work for or in connection with the provision of the dwelling, where the dwelling is not fit for habitation when completed. Before the Building Safety Act, claims under the Defective Premises Act had to be brought within six years of completion. The Building Safety Act extended that limitation period to 15 years for work completed on or after 28 June 2022 and, retrospectively, to 30 years for work completed before that date. The 30-year retrospective limitation has already generated claims against firms whose original design work was completed in the late 1990s.
What the new regime means for PI underwriting
The PI market’s response to the Building Safety Act has been broadly threefold: sharper questions at proposal stage, broader exclusions in policy wordings, and more conservative pricing of the long-tail.
Sharper proposal questions. A modern proposal form for an M&E consultancy typically asks not only the usual questions about fee income, sectors and claims history, but also for a structured breakdown of HRB exposure (current pipeline, recent completions and historical work), the consultant’s approach to fire-safety design and coordination, dutyholder roles accepted under the Building Safety Act, and the firm’s competence and CPD framework. Some markets ask for project-level information on the largest current HRBs. Underwriters are increasingly likely to decline a risk that they cannot understand at this level of granularity.
Broader exclusions. Fire-safety and cladding exclusions have been a feature of construction-professionals’ PI since 2018 but have broadened steadily. Wordings that originally targeted external wall systems and combustible cladding have, in some markets, evolved into exclusions that capture any claim arising directly or indirectly from fire-safety design, advice or coordination. The breadth varies; the wording matters. A consultancy with no involvement in cladding specification may nevertheless find its smoke-ventilation work caught by a broadly drafted fire-safety exclusion. Some markets offer write-back — for non-HRB projects, for work pre-dating a cut-off date, or on a project-specific basis — but write-back is increasingly difficult to obtain on competitive terms.
Conservative pricing of the long-tail. The 15-year and 30-year limitation periods mean that the policy underwritten in 2026 may be paying claims into the 2050s and beyond. Insurers’ actuarial models have struggled with that tail, and the result has generally been more conservative pricing, lower aggregate capacity and a preference for higher deductibles. Run-off pricing in particular has been volatile.
Retroactive date issues
The retroactive date on a claims-made PI policy sets the earliest point at which a wrongful act can have occurred for the claim to be covered. For a long-established consultancy with continuous PI cover, the retroactive date typically sits at the firm’s first day of trading. For firms whose corporate history is more complicated — incorporations from sole-practitioner days, mergers, demergers, sales of business — the retroactive date is the single most important provision in the policy for historical exposure.
The 30-year retrospective limitation under the Defective Premises Act has surfaced retroactive-date problems that had been dormant for years. A consultancy that was incorporated in 2010 from a partnership that had been trading since 1985 may find that its current PI policy responds only to work carried out from 2010 onward, leaving the partnership-era work potentially uninsured. Where the partnership accepted novation of its liabilities to the limited company on incorporation, that exposure now sits on the company’s balance sheet. The remedy is usually a negotiation with the insurer to extend the retroactive date or to purchase a specific extension; neither is straightforward, and both depend on the insurer’s appetite.
For any consultancy whose corporate history is more complex than a single continuous entity, the retroactive date should be checked carefully at every renewal and any proposed change resisted.
Fire-safety exclusions: how to read them
Fire-safety exclusions vary substantially between markets and have evolved over the last several years. A few features matter most.
Scope of activities caught. Some exclusions are framed narrowly around the design or specification of external wall systems and cladding; others extend to any fire-safety design, advice or coordination; the broadest extend to any claim arising “directly or indirectly” from fire-safety matters. The breadth of “indirectly” is doing significant work in some wordings — a claim about overheating that traces back through a smoke-extract design might, on an aggressive insurer interpretation, fall within an indirect fire-safety exclusion.
Defence costs. Some exclusions remove cover for damages but leave defence costs intact; others remove both. Where defence costs are also excluded, the consultancy is exposed to potentially substantial legal spend on claims that may ultimately be defensible.
Sub-limits versus full exclusions. Many markets prefer a sub-limit (for example, £1 million inclusive of costs for fire-safety claims, against a £10 million overall aggregate) to a full exclusion. The sub-limit gives the firm at least some protection but may be inadequate for a serious HRB claim.
Aggregation. Where multiple claims arise from the same underlying design defect, the aggregation language determines whether they share a single sub-limit or each have their own. On a project with several collateral warranties, the difference is material.
Available write-back. Specific write-back for non-HRB projects, for work pre-dating a defined cut-off, or for projects subject to specified peer-review processes, is sometimes available. The premium impact varies.
Each of these provisions should be reviewed at every renewal against the firm’s actual exposure rather than assumed to be unchanged from the previous year. Wordings move; markets harden and soften; firms acquire new work that may sit outside the existing carve-outs.
Cladding exclusions
Cladding exclusions are a related but distinct feature. They sit alongside fire-safety exclusions in many wordings and target claims arising from the design or specification of external wall systems. For an M&E consultancy that does not specify cladding, a cladding exclusion may appear irrelevant — but the wording often catches firms that have interfaces with the external wall, such as the design of penetrations for plant, the routing of services through external walls, or the specification of louvres and grilles in cladded façades. Where a fire-safety incident is traced to such a penetration, a broadly worded cladding exclusion can capture the claim.
Some wordings distinguish between ACM cladding, other combustible cladding, and external wall systems more generally. The scope and definition matter; broker review is essential.
HRB scope creep and the Cat 2/3 question
The strict statutory definition of a higher-risk building is comparatively narrow: 18 metres or seven storeys, containing at least two residential units. In practice, however, several adjacent regimes have extended HRB-equivalent expectations well beyond that cohort.
The Regulatory Reform (Fire Safety) Order 2005, as amended by the Fire Safety Act 2021 and the Fire Safety (England) Regulations 2022, applies fire-safety duties to a much wider range of buildings. Local authority building control teams have, in some cases, applied HRB-style scrutiny to schemes just below the height threshold. Lenders, warranty providers (NHBC, LABC Warranty and others) and institutional purchasers have set their own thresholds, sometimes applying enhanced design and information requirements to Category 2 and Category 3 buildings — student accommodation, care homes, hotels, mid-rise commercial — that fall outside the strict HRB definition.
For PI purposes, the effect is that a consultancy with no formal HRB exposure on its books may nevertheless face HRB-equivalent claim profiles on a substantial portion of its work. Underwriters are increasingly aware of this and are asking proposal questions about Cat 2 and Cat 3 exposure as well as the strict HRB cohort.
Dutyholder responsibilities and the practical implications
Where an M&E consultancy takes on a dutyholder role under the Building Safety Act — most commonly as principal designer for building regulations purposes, but occasionally as the client where the consultancy is procuring its own project — the firm assumes statutory obligations that extend beyond its contractual scope. The principal designer is responsible for planning, managing and monitoring the design work to ensure compliance with the building regulations, and for coordinating the design team’s collaboration on safety matters.
In PI terms, a dutyholder breach can give rise to claims by other dutyholders (under contribution arrangements), by the building owner, by future homeowners under the Defective Premises Act, and potentially to regulatory action by the Building Safety Regulator. Defence costs alone can be material. The firm’s PI policy should be reviewed to confirm that dutyholder-role exposure is within scope; some wordings exclude or sub-limit liability arising from statutory roles unless explicitly endorsed.
Practical placement implications
What does all of this mean for the practical task of placing PI cover for an M&E consultancy in 2026? Several propositions follow.
The proposal stage matters more than it used to. A submission that addresses HRB and Cat 2/3 exposure head-on, with clear narrative on the firm’s design protocols, dutyholder approach, fire-safety competence and golden-thread compliance, generates substantially better terms than a submission that treats these issues as boilerplate. Time invested at this stage pays back across the policy year.
The wording matters at least as much as the premium. A fire-safety exclusion drafted broadly can transform a £10 million policy into something materially less protective than the headline suggests. The cost of upgrading the wording — narrower exclusions, write-back, higher sub-limits, defence costs outside the limit — is sometimes a fraction of the premium spend on the overall placement.
Retroactive date and run-off planning should be a standing agenda item rather than a once-in-a-firm’s-lifetime exercise. The 15- and 30-year limitation backdrop has changed the economics of how a building services practice carries its historic tail.
The choice of insurer matters. A market that genuinely understands M&E design and is committed to the class will hold the line through claims and renewals in a way that a tourist insurer will not. We have seen firms switch insurers for a modest premium saving and regret it when a claim emerges the following year.
The broker relationship matters. The PI placement is not a commodity, and it is not best served by being shopped widely each November. We have generally found that consistent presentation to a curated panel of appetised markets, year on year, produces better outcomes than aggressive remarketing.
Frequently asked questions
What is a higher-risk building under the Building Safety Act? Broadly, for the building control regime, a building of at least 18 metres in height or seven storeys that contains at least two residential units. The definition for the in-occupation regime is similar but not identical. Buildings outside the statutory definition can still attract HRB-equivalent expectations from lenders, warranty providers and local authority building control.
How long can a claim now be brought against an M&E designer of a dwelling? For work completed on or after 28 June 2022, claims under section 1 of the Defective Premises Act 1972 can be brought within 15 years. For work completed before that date, claims can in certain circumstances be brought within 30 years.
Does my PI policy cover dutyholder roles under the Building Safety Act? Cover for statutory dutyholder roles varies between policies and should not be assumed. Where the consultancy regularly takes a principal designer role on HRBs, the policy wording should be reviewed and, if necessary, endorsed.
What is a fire-safety exclusion likely to catch? It depends on the wording. Narrow versions target only external wall systems and cladding; broader versions extend to any claim arising directly or indirectly from fire-safety design, advice or coordination — including smoke ventilation, evacuation lifts and firestopping at services penetrations.
What is the retroactive date and why does it matter for the Building Safety Act? The retroactive date is the earliest point at which a wrongful act can have occurred for the claim to be covered. With limitation extended to 30 years retrospectively for pre-2022 dwellings, design work done decades ago can now generate live claims, and the retroactive date governs whether those claims are within scope.
Are HRB claims more expensive to defend than ordinary PI claims? Typically yes. HRB claims usually involve multi-party design teams, technical expert evidence and protracted proceedings. Defence costs alone can be substantial.
What information should I have ready for a PI renewal under the new regime? Three years’ fee income by discipline and sector, an HRB and Cat 2/3 exposure breakdown, dutyholder roles accepted, fire-safety design protocols, competence and CPD arrangements, golden-thread information management, claims history, and detail on the largest current and recent projects.
Related guides
For the wider PI framework, see our pillar article on professional indemnity for building services consultants. For the distinct claims profile around sustainability and operational performance, see PI exposure for net-zero advisory engineers.
About this guide. This article was prepared by Apex Insurance Brokers and last reviewed in May 2026. It is intended as general information for UK building services consultancies and is not advice on any specific contract, policy or claim. The professional indemnity market and the regulatory regime continue to evolve; readers should take advice on their own circumstances.
Apex Insurance Brokers. Authorised and regulated by the Financial Conduct Authority, Firm Reference Number 724952. Registered in England and Wales, Companies House number 07014570. Registered office: Bristol. Email: info@apexinsurancebrokers.co.uk. Telephone: 0117 325 0027.
This article is part of our PI insurance for building services consultants (pillar guide). See the pillar for the full guide.