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Flammable cladding ‘faces coverage rejection’

Buildings featuring flammable cladding that does not adhere to Australian standards may find it hard to access full insurance cover, according to Strata Community Insurance (SCI).

The Strata Fire Safety Forum in Sydney earlier this month was told that 80% of apartment blocks in Australia face the risk they are covered in the highly combustible aluminium composite panels that caused the deadly Grenfell Tower fire in London.

SCI says buildings featuring such products need a remediation plan in place to remove or replace the cladding.

“As with asbestos from the 1980s, insurers will look to limit this additional risk,” it said.

“Today, it is almost impossible to obtain insurance for asbestos-related products and Strata Community Insurance fears aluminium composite panels may follow the same path.”

Building owners must ensure their insurers are aware of the cladding and its status, SCI says. Failure to disclose this information may result in no cover under a policy.

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