Architects, developers and contractors are bracing for a fresh professional indemnity squeeze after Wren Insurance Association Limited, which provides professional indemnity insurance to architects, confirmed it will stop underwriting and withdraw from the market.

The mutual will not offer renewal terms from 1 July 2026 and will instead wind down through a solvent exit, continuing to meet existing claims but writing no new business.

Its departure removes one of the last insurers willing to provide meaningful cladding cover following the Grenfell Tower fire, leaving a significant gap in an already constrained market.

Wren had continued to insure cladding risks while most providers imposed sweeping exclusions.

But a sustained surge in claims, largely linked to pre-2019 work, forced it to increase member funding calls and issue a supplementary levy last year.

In a statement the insurer said: “Since this announcement a significant number of Members have indicated that they will leave the Wren.

“The Wren Board considers that as a result of this, the business lacks the necessary size/scale to offer competitive insurance cover and has taken the difficult decision not to offer renewal terms from 1 July 2026.”

Wren chair Chris Bennie added: “We firmly believe that in the face of a reduction in membership, it is now in the best interests of our Members to make a solvent withdrawal”

The impact on live schemes is expected to be immediate. Architects moving into the open market face tighter exclusions, lower cover limits and higher premiums, particularly for fire and façade work.

That is already feeding into projects where consultants may no longer meet PI levels required under existing appointments.

Developers may now be forced to take on more risk as rival lenders scrutinise insurance-backed exposure more closely and push liability caps down.

Contractors will also feel the squeeze under design and build models, with gaps in consultant cover increasing pricing risk, tightening terms and raising the prospect of disputes.

A source said: “Unless new capacity emerges, the industry faces rising costs, reduced cover and slower project delivery.”

Wren’s members include major architect practices like Allford Hall Monaghan Morris, FCBS, BDP, Mace and WilkinsonEyre.