Insurance problems with the building industry are nothing new in Australia, but now New Zealand insurers are reportedly abandoning the sector or raising professional indemnity rates to unaffordable levels. Building inspectors, along with everyone from architects to builders and developers, are finding their insurers getting tough on rates – some rises are as high as 875% – or refusing to provide cover at all. Already the country’s largest private inspection firm, A1 Certifiers, has been forced out of business because it couldn’t obtain cover, and now other companies are suffering the same problems.

According to the NZ Herald in Auckland, the inspectors are being prevented from inspecting multi-unit homes that use a plaster finish that has been blamed for leaks and rot. “The exclusions apply retrospectively, so certifiers are no longer covered for many houses they inspected and passed several years ago,” the Herald said.

The insurers are bailing out of the home building sector because of shonky builders and increasingly litigious home-buyers, according to Government sources. Now Commerce Minister Lynne Dalziel is considering an industry plan to launch a fund to provide insurance. Insurance Council of New Zealand CEO Chris Ryan isn’t ecstatic with the idea, saying there are doubts that the scheme is affordable.