The NSW Government is considering a new “fit for purpose” design standard for registered professional engineers as part of ongoing efforts to improve standards in the building and construction industry. 

An industry roundtable meeting about the proposed measure was held on August 24 and attendees included JMD Ross Insurance Brokers and the Insurance Council of Australia (ICA). 

JMD Ross says it supports any initiatives to improve the NSW construction industry and the professional indemnity (PI) insurance market in general. 

“However, there is broad opposition to the proposed standard, despite it being restricted to fitness for purpose of a design and not the end product itself,” the broker says. 

During the roundtable meeting a number of key points were raised including likely impacts on the PI insurance market. 

“The PI market has seen notable premium increases and restricted availability of policies in recent years and the practice standard could fuel more of the same,” JMD Ross says. 

It was also pointed out at the roundtable that many PI polices do not cover the proposed design obligation measure and the obligation would contradict the current fitness for purpose exemption for architects and engineers under the Australian Consumer Law. 

A spokesperson for NSW Fair Trading says the proposed Practice Standard for Professional Engineers is aimed at providing a “clear and enforceable standard” of what is expected of engineers registered under the Design and Building Practitioners Act 2020. 

The proposed Practice Standard would apply to professional engineers as a condition of their registration in NSW. 

“It requires that design work prepared by professional engineers be ‘fit for purpose’, i.e. that the design work they are carrying out is capable of being used for the purpose for which they were contracted or engaged,” the spokesperson told insuranceNEWS.com.au. 

“The obligation covers design work that is fully within the engineer’s control.” 

The spokesperson says audits by the building regulator found a range of issues with design work by engineers including designs which lack the detail required to comply with the National Construction Code or Australian Standards. 

“The proposed ‘fit for purpose’ obligation will be from the professional engineer to the building regulator,” the spokesperson said. 

“The obligation, as part of the proposed Practice Standard, would be enforceable by the building regulator as a condition of the professional engineer’s registration in NSW.” 

The proposed Practice Standard was sent out to all registered professional engineers and targeted stakeholders for feedback in July and the Government is currently reviewing the submissions and feedback received. 

insuranceNEWS.com.au has asked ICA about its policy position on the proposal.