Building certifiers and surveyors in Queensland and NSW have been granted temporary exemptions to practice with cladding exclusions on their professional indemnity (PI) cover.

The move by the two states counters a crisis in the building industry brought on by the decision by UK-based Landmark Underwriting – the last provider of exemption-free PI policies in Australia – to withdraw from the market this month.

Insurers worldwide have stopped providing PI to the construction sector or have demanded stringent conditions such as cladding exclusions since the 2017 Grenfell Tower fire.

Queensland has also moved to ban combustible cladding on all new buildings as part of a two-pronged approach to helping the state’s certifiers, who like their NSW peers were required to have exemption-free PI policies.

“By banning combustible cladding on new construction in Queensland, it means there doesn’t need to be an expense for certifiers in the form of exclusion-free insurance,” Housing and Public Works Minister Mick de Brenni said.

“However, allowing insurance with exclusions is a time-limited solution that provides the industry with immediate confidence to continue operating.”

In NSW, Better Regulation and Innovation Minister Kevin Anderson said allowing PI with cladding exclusions will last no longer than a year, as he pushes for longer-term reforms.

He says the Building Ministers Forum will address the PI issue and reform options later this month.

Leading bank NAB believes government involvement is required to ensure appropriate PI polices remain available.

“Additionally, we support collaboration between relevant government departments and insurance and property industry groups to address this issue,” a spokesman told insuranceNEWS.com.au.