The Government has made the decision to close the state-backed External Wall System (EWS1) Professional Indemnity Insurance (PII) Scheme on 30 October 2023.
The Scheme was intended to be a short-term solution for assessors who were unable to purchase suitable professional indemnity insurance to conduct EWS1 surveys. The lack of appropriate insurance cover meant that EWS1 forms were difficult to obtain, and leaseholders in turn could not re-mortgage, buy, or sell their homes without an EWS1 form.
Government action has helped to address this market failure. The relevance of EWS1 forms is declining as wider Government interventions have taken effect that support lenders to use other forms of documentation to support commercial lending decisions. Our research shows insurers are offering professional indemnity insurance for EWS1 work and that assessors can access suitable insurance from the open market at a competitive premium and with a wider scope of coverage. The market has responded to the protection gap the Government was looking to address, which removes the requirement for the Government backed Scheme and so providing it is no longer a good use of public funds.
Policies sold under the Scheme to date will continue to be insured under the original terms. Please note that any pre-existing quotes obtained up to 30 October remain active for their respective 30-day validity period and can be retrieved using the quote reference.
For more information, please contact MGAM at EWS1help@MGAMutual.com.
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Insurance for assessors
This policy, supported by the UK Government, provides professional indemnity insurance cover for competent assessors to undertake EWS1 surveys and sign EWS1 forms.
Key features of the insurance coverage are that:
- It covers an External Wall System (EWS1) survey for a single building;
- It will cover civil liabilities arising as a result of performing surveys, ombudsman’s awards, and all reasonable legal defence costs incurred with the Insurer’s consent in the investigation, defence or settlement of a claim;
- The policy will respond to claims made in the future if the following conditions have been met:
(i) Claims must relate to a valid EWS1 form. An EWS1 form is valid for five years;
(ii) Should a loss arise when the EWS1 form was valid and relied upon by others e.g. mortgage lenders, valuers, buyers, sellers etc;
(iii) The loss is within the terms of the policy; and
(iv) The statutory limitation period on claims has not expired
(refer to the FAQs page for additional details regarding claims)
- Premiums are priced according to the height of the building; and
- Assessors have 60 days from purchase of a policy to pay the premium due
Please note that this is only a brief summary of the terms of insurance coverage. Please see the policy wording documents for full coverage details.
Links to related insurance documents
- Insurance Product Information Document (IPID) – The IPID provides information on the Insurance product to help the customer make a more informed buying decision and to compare Insurance Products.
- Policy Wording – Policy wording is the full terms and conditions and definitions of the insurance coverage.
- Terms of Business – This document describes the relationship between MGAM (the Managing Agent) and the customer and it sets out the rights, obligations and conduct between those two Parties.
- Agreed Form Professional Appointment – As a condition of the policy, you must use the Agreed Form Professional Appointment letter provided to enter into a contract with a building owner, their agent, or others with an interest in the building (such as a lender).Using the Agreed Form Professional Appointment letter ensures that your appointment and the scope of work is appropriately covered by our insurance policy.
- Agreed Form Professional Appointment (Scotland) – For use where the building to be assessed is in Scotland.