Home / Local / Surveyors warn PI insurance market facing ‘collapse’
25 November 2019
The professional indemnity (PI) insurance market will collapse within the next 12 months unless the Federal Government steps in with a rescue package, surveyors have warned.
The situation has worsened since July when Landmark Underwriting, then the last provider of exclusion-free covers, pulled out, according to the Australian Institute of Building Surveyors (AIBS).
AIBS says insurers have moved to withdraw indemnity covers for many types of commercial buildings, domestic swimming pools, wind farms, solar farms and wheat silos.
Insurers have also advised they are not prepared to remain in the market under the current conditions.
“Costs and excesses are increasing dramatically and new, previously unheard of, exclusions are coming into play,” AIBS said.
“Just where this will stop remains to be seen. Only one thing is certain. If nothing is done to stem the tide of deterioration in the availability of viable PI insurance, building surveyors and other consultants are going to struggle to stay in business.”
It says the consequences on Australians would be severe, with consumers slugged with increased costs, delays and possibly limitations on what they can build.
AIBS says the Government must act immediately with a support program or package to “ensure PI insurance is available and viable for building surveyors as a requirement for registration”.
It supports the longer-term reforms that have been pledged at state levels and backed by Canberra, but says there must be measures to also address the current situation.
“The coming months are going to be tough. Even if the Federal Government suddenly accepts its responsibilities and takes action, there will not be a quick overnight fix.”
AIBS is planning a number of actions in the meantime to help its members cope with the PI crisis, including the development of a professional standards scheme that would cap the liability of members.