Building surveyors and certifiers who were covered by London-based Landmark last year are now having to find alternative professional indemnity (PI) cover as renewals fall due.

Landmark actively accepted surveyor professional indemnity risks until June 30 last year, with security provided by HDI Global Specialty, and had provided policies without cladding exclusions.

But it has not been offering new policies since then and is not renewing existing cover as it falls due this year.

Bovill Risk & Insurance Consultants MD Chris Bovill says most of the risks previously covered by Landmark are likely to be taken up by other insurers, and the acceptance by governments of cladding exclusions has increased the available insurance market, with different terms and conditions.

Price impacts of switching from Landmark may not be a major issue despite premiums and excesses increasing in the market, as cover limits also decline.

“Landmark was instrumental in remediating the premium in this sector so the impact of changing to a new insurer should not be that significant this year,” Mr Bovill told insuranceNEWS.com.au.

“However, we will not know how this transpires until we commence transferring such policies to another insurer.”

Mr Bovill says the firm has been in constant touch with Landmark, which is continuing to try and secure new capacity to replace security previously provided by HDI.

Association of Accredited Certifiers CEO Jill Brookfield says cladding exclusions introduced to boost cover availability are not a long-term answer, and the Building Ministers’ Forum needs to announce a comprehensive package to encourage insurers back into the market.

“The crisis with PI insurance comes at an uncertain time in the global and Australian economy and it needs to be resolved to limit any damage to the building industry,” she said.

Insurance Council of Australia (ICA) Head of Risk and Operations Karl Sullivan says the PI situation appears no closer to being resolved by governments than when it was discussed at a February 17 building ministers’ meeting.

“It remains the governments’ responsibility to change the legislation and regulations across Australia to reduce the enormous risk borne by surveyors and certifiers,” he told insuranceNEWS.com.au.

ICA is calling for harmonised regulatory change across all states to fairly distribute the liability for building construction across the process, including for those who design, project-manage, supply, construct, and survey or certify.