No Images? Click here Concerns with Professional Indemnity and Building Certification The ongoing cladding problem brought on by building fires around the world, particularly London’s Grenfell and Melbourne’s Lacrosse, has highlighted the risk to insurers in professional indemnity (PI) policies. As a result, building surveyors (certifiers) face severe challenges when it comes to renewing their policies. A large proportion of building surveyors have insurance renewals due on June 30. With the last remaining provider of exclusion-free insurance pulling out, many building surveyors will not meet the registration requirements in some states. In Western Australia, our legislative framework does not have this requirement regarding registration, but the situation is still worrisome. Certifiers across Australia, working on all building types, are reporting insurance price hikes in the order of 400 to 600 per cent. Other certifiers are finding that they can’t renew their PI insurance without an exclusion for cladding. In some states, certifiers cannot have any exclusion on their PI insurance. The price hikes and the exclusions are forcing some certifiers out of business and others to significantly increase their fees. This is a problem for our industry nationally. We anticipate builders will soon have problems in getting certification on their projects in many states. The first certifiers are already having their licenses suspended and for builders in some states this has delayed final sign off and final payment. Industry stakeholders have highlighted the seriousness of this to the Federal Government, which is now considering allowing exclusions for certifiers on their insurance. This should allow those certifiers who don't work on buildings with a fire safety component to continue to operate. Other recent developments include the Federal Government considering a funding model to relieve pressure on insurers who are exposed for the cost of rectification measures to buildings with external combustible cladding. At best, builders need to be prepared for price increases for certification. At worst, builders need to be prepared to find a new private certifier. We strongly recommend builders engage with their building surveyor to understand their insurance position and ensure inspections can be completed for current projects. This is ongoing and Master Builders is working to provide solutions that work for all in our industry. Accepting policies with exclusions to enable registration of practitioners is not a long-term viable solution because it leaves practitioners, builders and consumers without appropriate protection. For further information contact Housing Director Jason at jason@mbawa.com
Jason Robertson |