Cladding and MMC: Key considerations for brokers

As organisations adopt modern methods of construction (MMC) to meet sustainability targets, manage costs and speed up project delivery, brokers need to adapt their understanding of how these building methods can affect risk, resilience and insurability.

Many new buildings now incorporate some form of MMC, with several factors driving this growth:

• Buildings can be delivered faster

• Factory-built components improve quality control, consistency and worker safety

• Construction and labour shortages are exacerbated by global events, increasing demand for offsite manufacturing

• Carbon and waste reduction.

Many MMC buildings are designed to resemble traditional techniques, but their underlying construction may be very different. Hidden behind the external finish, they may contain combustible insulation, timber structural elements or lightweight modular components. This makes understanding the underlying construction critical when assessing risk and arranging insurance.

Cladding systems are frequently used on modern buildings to improve thermal efficiency and aesthetics. The risks with cladding can vary significantly depending on the type of cladding, full wall construction, quality of installation and the materials used.

External Thermal Insulation Composite Systems (ETICS)

ETICS incorporate insulation boards fixed to an external wall and covered with a rendered finish. The risks with ETICS vary significantly depending on the insulation material used.

Insurance considerations:

• Combustible insulation materials may be present behind seemingly solid rendered finishes.

• Service penetrations can expose insulation cores.

• Effective fire stopping around penetrations is essential.

• Full wall construction details are needed to assess fire performance accurately.

High Pressure Laminate (HPL) cladding

HPL panels are commonly used as decorative façade panels and are typically made from compressed wood-based fibres.

Insurance considerations:

• Fire-retardant treatments can improve performance, but brokers should not assume all HPL systems present the same level of fire risk.

• Fire performance may affect insurer appetite and premium levels.

Rainscreen cladding

Rainscreen systems use an external façade panel separated from the building by a cavity.

Insurance considerations:

• The cavity can create a ‘chimney effect’, accelerating fire spread.

• Fire barriers and cavity barriers are essential.

• Insurers require detailed information about both cladding panels and insulation materials.

• Always ask the question
  MMC is not used exclusively on new buildings; rebuilds, extensions and energy-efficiency upgrades to existing buildings may include cladding too.

• Explore the full picture
  Ask about the type of cladding, full wall build-up, insulation type, cavity barriers, fire stopping and installation certificates.

• Emphasise competent installation
  Even suitable materials can perform poorly if joints, penetrations, cavity barriers or fire stopping are incorrectly installed or later compromised. Choosing experienced, qualified professionals can make all the difference.

• Don’t just fit and forget
  Regular maintenance and inspection are essential. Find out whether your client has a plan in place.

• Prioritising safety and resilience
  Understanding the cladding system isn’t just about securing cover. It can also help clients identify potential fire safety concerns, protect people using the building, support business continuity and avoid costly issues later.

For brokers, the key message is to ask early, ask for detail and share as much construction information as possible with insurers. This can support more informed underwriting decisions and reduce the risk of issues arising later.