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Building Safety: Contractors caught in the middle?

June 2026

The Building Safety Act 2022 (“BSA”) has reshaped the UK construction landscape. What began as a regulatory response to Grenfell has evolved into a live contractual and commercial risk that is central to how projects are procured, managed and delivered. The obligations arising from the BSA are increasingly driving how building contracts are drafted and negotiated.

Contractors are increasingly caught between employers seeking to transfer regulatory risk, consultants narrowing their liability and insurers adopting a more cautious underwriting position. This article highlights some of the key contractual themes emerging from the BSA and steps contractors can take to manage the associated risks.

Shifting of BSA related risks

Clients are actively looking to push BSA compliance risk down the supply chain, with contractors the primary target. Compliance is frequently treated as a standalone contractor obligation, rather than as part of a wider, interdependent chain, involving clients, designers and the Building Safety Regulator (“Regulator”).

Gateway delays or refusals are frequently characterised as contractor risks, despite being influenced by third-party design inputs, client decisions and regulatory processes outside of the contractor’s control. We are increasingly seeing contractors asked to take the risk of obtaining gateway approval based entirely on statutory or assumed timeframes for the Regulator to give its approval. In the context of increasingly challenging programmes (and the prospect of liability for high liquidated damages), the risk of Regulator approval is a significant one for a contractor to take on, particularly given the latest statistics on gateway approval:

• Although the Regulator has a statutory target of 12 weeks for new builds (or 8 weeks for existing buildings) to approve valid gateway 2 applications, the data shows that in the 12 weeks to 1 May 2026 the average time to reach a decision was 35 weeks.[1]
• It was reported[2] that, as of 21 January 2026, based on 201 applications submitted for gateway 3 approval between Q2 2024 to Q1 2026, 35 were approved within three months while 57 were approved after three months. Gateway 3 approval is supposed to be within 8 weeks.

Clients are also increasingly expanding contractor exposure under building contracts through:

• Liability cap and exclusion clause carve-outs: Broad exclusions for “building safety” or “fire safety” risk which undermine liability caps and exclusions. Any caps and exclusion should be narrowly defined and aligned with insurance coverage.
• Extended liability periods: Extending standard liability periods, including to reflect the 30‑year retrospective period under the Defective Premises Act 1972 (“DPA”). Contractors should resist extensions beyond statutory baselines, particularly on non-residential projects.
• Onerous dutyholder obligations: Principal Designer and Principal Contractor roles are often supplemented with enhanced competency warranties that go beyond statutory requirements. Contractors should ensure these obligations align with the statutory position, their actual role and internal compliance systems.
• Extensive “golden thread” obligations: These are often open-ended and administratively burdensome, and should be clearly scoped, priced with obligations aligned throughout the supply chain.

Fitness for purpose (“FFP”) and absolute obligations

There is increasing use of FFP obligations linked to BSA compliance. Contractors are required to warrant that works will be compliant and fit for occupation, effectively guaranteeing outcomes and regulatory approval.

This is a significant problem for contractors, as:

• Insurance misalignment: FFP obligations create a mismatch with professional indemnity (“PI”) insurance, which is typically written on a negligence basis (i.e. a failure to exercise reasonable skill and care), leaving contractors exposed to uninsured liabilities.

• Consultant mismatch: Consultant appointments often exclude FFP obligations and include liability caps, creating gaps where risk is passed to contractors.
• Uninsurable exposure: Particularly in fire safety and façade design, insurers are restricting cover, making some risks uninsurable.

Contractors should resist or qualify FFP obligations by aligning them to a reasonable skill and care standard and clarifying that regulatory approval cannot be guaranteed. Consultant appointments should be fully back-to-back with the building contract.

Retrofitting BSA Obligations onto Standard Forms

JCT and NEC contracts are increasingly being amended to incorporate BSA requirements. In practice, these amendments frequently fail to adjust core risk allocation mechanisms, particularly for time, cost and change.

This often results in:

• limited or no entitlement for the contractor to claim relief for regulatory delays;
• inadequate recognition of design development risk, including late-stage changes arising from Gateway requirements and feedback from the Regulator;
• insufficient protection from changes in law and guidance; and
• gaps in insurance coverage, particularly where contractual obligations are extended beyond insurable standards of care.

The creates a disconnect between enhanced compliance obligations and traditional risk allocation which increases pressure on programmes and margins and heightens the risk of disputes, particularly on higher-risk buildings.

Insurance market contraction

Insurers are adopting an increasingly cautious approach, particularly in relation to façade design, fire safety, and higher-risk buildings more generally. This has resulted in:

• exclusions and limitations in cover for certain building safety risks, reducing the scope of protection available;
• increased premiums and more stringent underwriting; and
• reduced market capacity (particularly following the withdrawal of Wren from the PI market).

These trends reflect ongoing uncertainty around the scope of liabilities under the BSA, extended limitation periods (particularly under the DPA), and the emergence of Building Liability Orders, which may extend liability across corporate groups.

The effect is a widening gap between the contractual risks assumed by contractors and the insurance protection available to them.

1. The Future

The Building Safety Act represents a necessary shift in the industry’s approach to safety, accountability and transparency. However, its contractual implementation often remains commercially unbalanced.

Contractors are increasingly considered as the default risk bearer, despite BSA compliance being inherently collaborative. This misalignment places sustained pressure on pricing, programme certainty and project viability.

Contractors must adopt a disciplined and proactive approach, including:

• rigorous review of contract terms at tender stage;
• alignment of obligations with risks that are within its control and insurable;
• securing clear entitlement to time and cost relief;
• developing robust internal policies and competency frameworks to demonstrate compliance; and
• ensuring consultant appointments and supply chain terms are fully back-to-back.

The market remains in transition. Until contractual frameworks evolve to reflect the shared nature of BSA obligations and the realities of regulatory engagement, contractors will continue to operate in a constrained and uncertain risk environment. Those best placed to navigate it will combine a clear understanding of the regime with well-developed internal documents, policies and competency frameworks that translate BSA requirements into practical and deliverable outcomes.

If you have any questions regarding the information discussed in this article, please contact Ben Couldrey and Alex Homatas.

[1] See https://buildingsafety.campaign.gov.uk/building-safety-regulator-making-buildings-safer/the-building-control-authority/building-control-approval-application-data/

[2] https://www.building.co.uk/news/hold-ups-now-dogging-gateway-3-building-safety-approvals-foi-reveals/5140714.article

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