The Insurance Threats from Technology and Buildings

This month Paul Robertson from 1st Sure explores technology and buildings, explains some of its implications in respect of insurance and why he now struggles to use his mobile phone.

We all love our personal technology, well most of the time, when it works and it is certainly true that most of our businesses have been revolutionised by technology. But what of blocks of flats and what are the implications of technology on leaseholders?

When we talk about technology we automatically think about Smartphones, applications and all the other new-fangled gadgets that surround our life. Technology has revolutionised the way in which we construct buildings and the rate of change over the last 20 years has been extraordinary.

Probably we don’t automatically recognise this because in essence the technology is hidden below the surface of the building.

Historically blocks of flats were built from a very traditional pallet of materials which included bricks, concrete, wooden joists and tiles/flat roof coverings. Nowadays buildings are constructed far faster and cheaper using an array of modern materials. Most of these have evolved and become commonplace in the last few decades but what are the long term consequences of the technology used in these modern materials?

From an insurance perspective these modern methods of construction have been relatively disastrous. Plastic pipe work can be far more quickly installed with clip together joints, however the reality is that this technology has led to a dramatic increase in escape of water claims compared to using copper pipes. The same can be said for pod construction where kitchens and bathrooms are made off site, thus reducing cost and build time but again in respect of insurance, these pods can be very difficult and far more costly to repair than traditional build methods.

Of course we have seen the horrendous impact of material technologies in respect of cladding and insulation and again these have not been good for flat owners. Sadly technologies that would benefit flat owners are rarely incorporated into newly built blocks. It would be nice to see leak detection systems and fire alarm systems along with other intelligent technologies that could communicate with property managers as a standard feature of new buildings. Regrettably developers are more interested in the gold taps on the bathroom suites as these are the features that make flats sell.

For me personally I expect to see advances in app led technology over the next few years, enabling lessees to control functions of their flat from their Smartphone. The inherent danger of such technology will be its vulnerability to cyber threats and this is something that both insurers and property managers will need to consider in the future. My view is that block insurance policies will need to evolve to protect against these threats and alongside this, leases will also need to evolve to understand the inherent complexity of embedded systems designed to control buildings.

Personally I am of an age whereby I struggle to use the interface on my Smartphone and all the teenagers who used to show me how it worked are also that much older and they themselves are struggling with mobile devices. You may think I am exaggerating on this point but I was recently told by a 25 year old that they have stopped using a function because it was too complicated. Hopefully Santa Claus will bring me the illusive instruction manual that regrettably was not shipped with my current Smartphone.

PS If are still looking for that stocking filler then it’s not too late to order a copy of Robertson’s insurance principles for leasehold flats.

Paul Robertson is Managing Director of 1st Sure Flats and Midway Insurance. Contact Paul by email or on 0345 370 2848.

Reviewed: July 2019