Chubb property risk bulletin: Composite timber cladding products

Aluminium composite panels (ACP) have contributed to a number of devastating building fires in recent years and become a well understood property risk.

Now other composite cladding materials have been thrust into the limelight thanks to a recent judgement from the NSW Civil and Administrative Tribunal: https://www.caselaw.nsw.gov.au/decision/5df0887ce4b0ab0bf60748b1.

In November 2019, the builder and developer of an apartment complex was ordered to replace a timber based composite cladding material used on the exterior of the building. The tribunal found that the product was combustible, the installation did not comply with the Building Code of Australia (BCA) and was in breach of statutory warranties in section 18B of the Home Building Act 1989 (NSW).

The cladding material was a timber and plastic composite comprising of approximately 70% reconstituted timber fibres and 23% PVC. Other timber based composite products on the market include high pressure laminates, and types of MDF boards and plywoods. The fire properties of these products can vary considerably depending on the amount of plastic, resin and additives used during the manufacturing process.

Although recent large fires involving Aluminum Composite Panels (ACP) with a Polyethylene (PE) core have confirmed the high combustibility of composite materials, the fire performance of timber based composite materials cannot be directly compared to ACP. PE has a high heat of combustion, becomes molten and produces toxic fumes in a fire. This is a dangerous combination that can promote the spread of fire. While timber based composite materials are combustible, they will generally have a lower heat of combustion and a slower rate of fire spread.

Some media outlets reported that the recent judgement could have far-reaching consequences noting the considerable costs associated with replacing timber based cladding products on high-rise buildings. It is important that the level of risk is considered during the property underwriting process and consultation with an accredited Fire Safety Engineer is recommended.

Property underwriting considerations for timber based composite cladding products

When assessing the level of risk associated with combustible cladding products, Chubb risk engineers consider a range of risk factors to determine the suitability of the cladding product from a Property insurance perspective. These include:
 

1. The fire properties of the material. Timber based products are generally combustible unless it satisfies AS1530.1 combustibility criteria.
   
   
2. How will the material perform in a fire? Because the performance of timber composite materials can vary greatly in a fire, each product should be reviewed on a case by case basis.
   
   
3. Is the insulation or substrate behind the cladding combustible?
   
   
4. Where is combustible cladding located on the building?
   
   
5. Is cladding installed at a height greater than 25 metres above ground level?
   
   
6. What fire ignition sources are situated near the cladding?
   
   
7. Is the building protected throughout by fire sprinkler systems?
   
   
8. Has the cladding system been tested to approved large scale fire test standard such as BS 8414, ISO 13785-2, AS 5113:2016 and FM 4411?
   
   
9. In addition to fire performance, how does the cladding system perform when subjected to other weather extremes such as high winds, hail, heavy rain, temperature variations etc?

Small quantities of combustible cladding materials installed on low rise structures less than 25 metres high may be acceptable from an insurance perspective. However, situations involving the widespread use of combustible cladding on buildings can present an unacceptable fire risk, particularly for high-rise buildings. Rectification actions are often recommended by Chubb Risk Engineering Services to reduce the risk of fire ignition and fire spread.

The 2019 fire involving high pressure laminate cladding on a student housing building in the United Kingdom is an example of a potential fire loss scenario.

In summary, not all timber based composite cladding products and the level of fire risk they present are the same. It is therefore important to evaluate each property on the risk factors present.

Regardless of property insurance considerations, it is essential that the use of any external cladding fully complies with the requirements of the National Construction Code.

Additional information

You can find a Chubb Risk Bulletin on Aluminium Composite Panels in the Risk Engineering Resource Centre.

Chubb has a team of dedicated risk engineers who can assist policyholders with their property risk exposures. For more information, please contact Risk.Engineering.au@chubb.com