A long-running feud over more than 1500 burst pipes in newly constructed WA homes may be potentially costly for insurers, depending on how the dispute plays out. 

Fletcher Building, the parent company of the company that makes the pipes, says the product is not defective and that the problems are caused by installation faults. 

Perth builder BGC has said the Pro-fit polybutylene pipes manufactured by Iplex Australia are faulty and that a recent investigation by Building and Energy, WA’s plumbing regulator, “aligns” with its stance. 

BGC CEO Daniel Cooper said in August it had attended “more than 1600 bursts, across nearly 1000 homes”. 

“Whether it be construction, home or strata policies, they will have an exclusion that says they will not cover for damage as a result of faulty design, faulty workmanship or faulty materials,” LMI Group Executive Chairman Allan Manning told insuranceNEWS.com.au. 

“Good policies and most policies will have a writeback for the resultant damage so the water damage caused by the burst pipes may be covered, depending on the policy. But the cost of rectifying the faulty work will not be covered. 

“The insurance industry can’t afford for people to be using bad materials or doing bad labour and then just getting the insurer to pay for it.” 

Building and Energy provided an update in August about its investigation into the water leaks from the Pro-fit pipes. As part of its investigation, the regulator conducted inspections at more than 50 properties where pipe failures occurred. 

“Most water leaks occurred in pipes manufactured between mid-2017 and mid-2022,” the regulator said. 

“These inspections found that installation work practices and workmanship were not the cause of the pipe failures.” 

The regulator has shared its findings with the Australian Competition and Consumer Commission (ACCC) and Consumer Protection as regulators of national product safety legislation. 

In April this year Iplex set aside $15 million to help affected WA properties fix the pipe leaks and to date 383 homes have had the problem addressed, Fletcher said Friday in a briefing. 

“There are no abnormal leakage issues on the pipes installed in the east coast of Australia,” Fletcher CEO Ross Taylor said Friday. 

“Evidence firmly points to installation as the reason the leaks are occurring in some houses in Perth and installation practices appear to have deteriorated over recent times in Perth. 

The product has not been sold since last year.