The next wave: building safety, AI exposure and expanding corporate liability

Building safety — A second wave

Following the 9th anniversary of the Grenfell Tower tragedy, we continue to receive numerous instructions in relation to building safety claims. These tend to be multi-party claims, brought either as Part 20 contribution claims in the original action or as stand-alone recovery claims against a building contractor’s supply chain.

By virtue of the extended limitation periods (up to 15 years for new dwellings and 30 years for older properties) introduced to the Defective Premises Act 1972 (“DPA”) via the Building Safety Act 2022 (“BSA”), some of these claims relate to significantly historic projects where documents and factual witnesses may no longer be available. In some instances, we are seeing claims being brought on the basis of assumed facts. Tactically, this provides an opportunity to seek strike out applications or have matters determined as preliminary issues to apply focus, potential cost savings and early outcomes, including settlements.

Claims for Building Liability Orders against parent and associated companies, introduced by the BSA, are also featuring heavily as claimants “follow the money” in an industry where insolvencies are prevalent and insurance cover is uncertain. We continue to receive coverage instructions on a wide range of issues, both as standalone advice but also in the context of direct claims against insurers pursuant to the Third Parties (Rights Against Insurers) Act 2010 where the claimant’s claim for an indemnity against an insurer is only as good as the insolvent policyholder’s claim would have been against that insurer.

Beyond cladding — beaten to the punch?

We are also seeing an increase in building safety claims beyond cladding with a particular focus on structural stability. Structural defects including cracking may be discovered as a building is stripped of its cladding, leading to further investigations being undertaken, but it can also be prevalent on non-cladded buildings too. To the extent that this leads to a building not being fit for habitation, a claim may be possible under the DPA with the extended limitation periods available to claimants. One particular trend is that of “punching shear failure” which is a brittle, localized failure of concrete slabs around columns caused by concentrated loads exceeding the slab’s shear capacity.

Artificial Intelligence

Although we are not yet seeing a raft of claims being brought against professional businesses, it can only be a matter of time before such claims become more prevalent as professionals increasingly rely on AI and technology. Insurers will no doubt be focusing on a professional business’ governance, culture and supervision where AI is used to manage the obvious risks of incorrect advice being given.

One trend that we, and our insurer clients, are seeing is in relation to what has become known as “AI bombing” where claimants, often litigants in person, are using AI to identify and formulate claims and then to seek to overwhelm claims handlers with almost immediate replies to their responses. This can not only be in relation to third party, but also first party claims.

This has led to more pressure on claims handlers, and choices to be made for insurers as to the triaging of such claims and around providing additional capacity within claims teams to help cope with the increased demand. This will be one of the subjects that we discuss with our expert panel on 15th September in London. This is an in-person event, and you can register here.

D&O/Management Liability

Hot on the heels of last year’s new requirements on businesses to enhance transparency and prevent crime within UK business, presented by the Economic Crime and Corporate Transparency Act (ECCTA), further legislation is to be introduced this year which will impact directors and officers.

The Crime and Policing Act 2026 (“CPA”) received Royal Assent on 29 April 2026 with s.250 coming into force on 29 June 2026, extending the “senior manager” attribution model beyond economic crimes to any criminal offence.

This is likely to drive notifications, investigations, and coverage disputes around insured persons and corporate entities with increased D&O notifications expected. We may see a rise in internal investigation costs as organisations reassess their risk exposure and regulators and prosecutors seek to test the expanded attribution framework.

We have already commented on the threat of claims based on exposure to “forever chemicals”, or PFAS (per- and polyfluoroalkyl substances) (UK Government PFAS Plan heralds liability uptick | Weightmans).

The soft market — opportunities and risks

Soft market conditions have persisted through 2026, with no obvious signs of changing, but at the same time, our insurer clients tell us that they are actively looking for growth. The recent Q1 2026 Insurance Focus UK Market Update by Gallagher reports that a buyer-friendly climate has persisted into 2026, with risk-adjusted rate reductions of around 15% to 25% having been widely achieved at the recent January renewals.

Particularly since Grenfell, we have seen insurers looking to limit their exposure in the construction field with more restrictive terms being offered and increasingly broader exclusions being introduced. It would be easy for insurers to allow such restrictions to be re-negotiated as they chase growth, but the non-exhaustive examples outlined above as to where claims can, and will, arise, should encourage prudence to be exercised.

As Gallagher note, and as we have seen, MGAs are pushing capacity growth and offering flexibility leading to broader coverage offerings and downward pressure on rates. Nevertheless, for all insurers in the market (from MGAs through to the more traditional), the need to focus and interrogate on risk- including governance, culture and process - and a willingness to say “no” if the deal is not right, remains imperative.

The way forward

As these soft market conditions persist through 2026, insurer clients must remain highly proactive in protecting themselves against exposure. Moving forward, we will continue monitoring these market developments, and the related claim trends, closely. We are also particularly interested in hearing how you approach and mitigate the unique risks posed by the rapid expansion of AI amongst businesses as we approach the second half of 2026.