The ongoing professional indemnity (PI) stalemate could drag on longer than expected, according to the Insurance Council of Australia (ICA).

The council made the assessment in a submission to the NSW Government as it called for an extension to the one-year period building practitioners are allowed to hold PI covers with exclusions for cladding.

Licensed surveyors and certifiers in the state must hold indemnity policies without exclusions. The NSW Government was forced last July to lift the requirement when Landmark Underwriting, then the last provider of PI with no exclusions, pulled out of the market.

A mid-2020 deadline has been set for the interim measure to be removed.

Better Regulation Minister Kevin Anderson has said he expects the reform actions pledged by the Government to have improved the conditions in the PI market and restored insurers’ confidence.

But ICA thinks otherwise.

“While the Insurance Council and its members are working with Australian governments to realise that expectation, the cladding exclusion may be required beyond the currently prescribed date,” ICA says in the submission to a consultation on proposed reforms of the certification system.

ICA believes broader reforms beyond “ascribing liability to certifiers” will be needed to bring about a long-term fix to the PI problem, which stems from the use of non-compliant cladding and other defective works plaguing the building industry.

Insurers will only return when they are convinced the building sector’s problems have been cleaned up, ICA says.