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PI dilemma leads to call for delay in NSW building reforms

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The NSW Government has been urged to put on hold plans requiring building practitioners to hold full professional indemnity (PI) cover until it has engaged with the insurance industry.

The Legislative Assembly inquiry led by the Public Accountability Committee made the suggestion in its first report on the troubled building industry.

The Insurance Council of Australia (ICA) has previously voiced its concerns that the PI requirement, which is contained in the draft Design and Building Practitioners Bill, may affect insurers as they have stopped offering exclusion-free covers to the industry.

“It is extremely concerning that there is no current insurance product that would provide the kind of professional indemnity insurance that is required under this bill,” the committee says in the report.

“The committee would have thought that there would have been some assurance that an insurance product would be available before legislating this requirement.

“Given this, the committee recommends that the NSW Government not proceed with the bill until it works closely with [ICA] to develop appropriate insurance products.”

The report released last week makes 19 recommendations. These include setting up an independent building commission statutory body, creating a senior building minister portfolio and extending the scope of the Home Building Compensation scheme to include residential buildings that are three storeys or higher.

The deadline for the committee’s final report has been pushed back by three months to May 14 next year.


Click here for the report.