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Governments slammed over PI inaction as forum looms

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Building surveyors and certifiers have pressed for urgent action to address the worsening professional indemnity (PI) insurance crisis on the eve of tomorrow’s Building Ministers’ Forum (BMF) in Canberra.

They say failure at the federal and state levels to properly address the problem, which was flagged more than a year ago, has contributed to the current mess where insurers are no longer willing to provide exemption-free cover to professionals such as building surveyors.

At the same time, building practitioners have had to accept sharp premium rises, huge excesses and a list of exclusions just to secure a PI policy.

“Governments are not responding to this issue with the urgency the situation requires,” Association of Accredited Certifiers CEO Jill Brookfield says in a statement issued today.

“A year of no progress and uncertainty is hurting accredited certifiers [and] our industry.

"Accredited certifiers are currently facing premium increases as high as 1200%, and an environment where insurers are pulling out of the market.”

Ms Brookfield likens tomorrow’s forum to the construction industry’s “D-Day”, saying it is imperative that Federal Industry Minister Karen Andrews and her state counterparts outline a course of action or the industry “will grind to a halt”.

“We know insurers are refusing to provide cover to accredited certifiers and insurance policies are even being sold that contain exclusions that do not comply with regulations,” she said.

“We need to manage this at a national level. Enough is enough.”

The Australian Institute of Building Surveyors (AIBS) has also hit out at the governments’ handling of the insurance stalemate, which has resulted in part by the use of non-compliant flammable cladding materials in high-rise residential buildings.

Referring to the state and territory governments, AIBS says it is “easy to overlook the seriousness of this issue when you do not properly consult with industry and therefore isolate yourselves from the real building and construction industry world”.

The BMF meeting tomorrow must decide on a “national, unified approach” to fix the cladding problem, it says.

“If you make just one decision at your December meeting, it must be this,” the AIBS says in reference to cladding. “It is not good enough to continue to suggest that this is the sole responsibility of the building and insurance industries.”

More than one in 10 surveyors have stopped providing statutory surveying services over the last 12 months because of problems with PI insurance, a recent AIBS survey has found.

Nearly one in 10 have been forced to scale down the scope of services offered because of restrictions imposed by insurers.

GMA Certification Group, one of Queensland’s biggest building certifiers, recently managed to secure a PI renewal but it cost about $800,000 in premium – more than four times the previous cost.

“I think the whole building industry is feeling the pinch at present on insurance,” GMA MD Geoff Mitchell told insuranceNEWS.com.au. “We were probably the first of the big ones to get really whacked with it.

“It’s probably not sustainable. The issue I have also is that I couldn’t get retroactive cover for the full amount.”