Home / Regulatory & Government / NSW explores new apartment defect insurance
25 October 2021
The NSW Government aims to “weed out” untrustworthy apartment developers with the introduction of decennial liability insurance (DLI) to guarantee against major defects for up to 10 years and provide a safety net for consumers which is currently lacking in the multi-unit high rise sector.
DLI, which is taken out by the developer, is not currently available in Australia.
NSW has established a specialist Ministerial Advisory Panel to advise on its introduction, chaired by past Insurance Council of Australia President Gary Dransfield and made up of leaders from the insurance, construction and finance sectors, including IAG Chief Underwriting Officer Darren Maher.
The Panel is expected to report to the state government with options next year.
“Establishing a market for DLI would will mean untrustworthy developers are weeded out, creating a stronger, more competitive market where consumers can purchase with confidence,” Minister for Better Regulation and Innovation Kevin Anderson said. “While good quality work will be underwritten, poor quality developers will find themselves out of the market.”
Insurers will assess developers’ ratings scores, corporate governance and balance sheets, he said.
Insurance Council of Australia (ICA) CEO Andrew Hall welcomed the announcement of the panel.
“The ICA supports the establishment of the Decennial Liability Ministerial Advisory Panel and congratulates the NSW Government,” Mr Hall said. “We welcome the opportunity to work with Government on this important area of consumer protection.”
Aside from Mr Dransfield and Mr Maher, members of the DLI Ministerial Panel include: