Home / Local / PI woes escalate for surveyors
7 October 2019
Surveyors involved with projects of more than three storeys are unable to secure professional indemnity (PI) covers, according to the Australian Institute of Building Surveyors (AIBS).
The situation has worsened since July when Landmark Underwriting, then the last remaining provider of exclusion-free PI policies, pulled out to reduce its exposure to the problem-plagued construction sector.
“We have been advised…that insurers who remain prepared to underwrite building surveying risks have indicated they want to reduce their exposure and, in some cases, withdraw completely from this particular area,” the AIBS says.
“This now means that any building surveying firm that has, or has had, projects over three storeys or other large projects, is going to find it increasingly difficult or may even not be able to obtain PI insurance.
“A number of firms have already advised they have been unable to obtain insurance. This has resulted in drastic measures, including searching offshore for insurance.”
Bovill Risk & Insurance Consultants, the main PI insurance broker to surveyors and other building professionals, says the market has tightened further since July.
“We are probably experiencing the scenario now which we have never before experienced in that we are unable to get insurance for certain businesses,” MD Chris Bovill told insuranceNEWS.com.au.
The AIBS has been pushing for a national cladding repair program as the first step to regaining insurers’ confidence but Federal Industry Minister Karen Andrews has ruled it out.
She maintains the matter would be handled by the states and territories as was agreed at the last Building Ministers’ Forum in July.
NSW and Queensland have also rejected the idea of a rectification scheme similar to Victoria’s $600 million plan unveiled in July.
Queensland Housing and Public Works Minister Mick de Brenni told insuranceNEWS.com.au “the companies who built these buildings, and their insurers, should pay to fix their own mistakes”.
“Building owners are responsible for rectification of their buildings,” he said. “Queensland taxpayers should not have to pay for the decisions made by developers who have led a pursuit of profit over quality and safety for decades.”
NSW Minister for Better Regulation Kevin Anderson is also against taxpayers stepping in to pay for the cladding repairs as there are several schemes in place for owners to seek recourse.
Changes made in April last year to the Home Building Regulation Act specifies cladding likely to cause a fire safety threat to occupants is considered a major defect.
“Owners can claim on these statutory warranties for any defective building work within set periods, including up to six years for major defects,” a spokesman for the minister says, adding “it would not be appropriate for NSW taxpayers to take over the financial responsibility of remediation at this stage.”