Only a co-ordinated national approach can resolve the growing crisis engulfing the building industry, the Insurance Council of Australia (ICA) says.

It’s urging state and territory governments to act now on finding a solution to this “unsustainable” problem.

GM Risk Karl Sullivan says the states and territories must ditch the “partial and piecemeal fixes” approach, which do not address the systemic problems in the industry.

And he says it’s about much more than just about the use of dangerous cladding materials.

ICA’s call follows the decision by London-based Landmark Underwriting, the last provider of exclusion-free professional indemnity covers (PI) in Australia, to no longer cover the market from next week.

Several trade bodies have said the move could effectively put building surveyors, certifiers and other construction professionals who are required by law to have PI covers free of exclusions out of work unless another insurer stepped in to fill the void or affected jurisdictions changed their regulations.

“Piecemeal fixes by governments are not going to restore public and insurer confidence in the construction sector,” Mr Sullivan said.

“The building certification regime in many jurisdictions is flawed… this is a national issue and requires national consistency.

“Insurers play a crucial role in the building industry but they are at the end of the risk management chain. The situation is unsustainable.

“Many insurers are reluctant to continue providing unrestricted PI products to these professionals unless the key issues – flammable cladding and significant defects in buildings, including the compliance regime failures that have contributed – are addressed by governments and the building and construction sector.”

ICA’s action list includes the establishment of a building industry-funded program to pay for rectification works and to compensate property owners caught out by the limitations built into defects liability regimes.

Landmark Underwriting did not respond to calls from insuranceNEWS.com.au.

Steve Burton, the Deputy Chairman of Engineers Australia Society of Fire Safety has suggested a national PI insurance scheme, funded through a levy, should be set up to ensure the availability of cover for building professionals.

“The building industry needs a national PI scheme,” he said today. “Otherwise there will be no certifiers available because they can’t take the risk of certifying without PI insurance. That leaves the community at risk.

“We need an insurance scheme that covers all product and structural defects.”