Victoria is pushing for an Australia-wide approach to deal with an impasse in professional indemnity insurance (PII) facing the building industry, as the combustible cladding issue affects professional premiums.
At the Building Ministers’ Forum in Adelaide on Friday Planning Minister Richard Wynne said work must be done with the insurance sector to help quantify risk, particularly around cladding cover for building surveyors.
Concerns relate to the tightening market for professional indemnity insurance for building practitioners, with reports of new exclusions in PII policies that exclude insurers from liability for claims from products such as cladding.
Increases to insurance premiums have also been reported, with fears this may raise costs in the construction sector.
Building Ministers from across Australia meeting in Adelaide resolved to develop a national approach to the issue, in consultation with the Building Regulators’ Forum, the insurance industry and industry stakeholders.
They agreed to:
- Engage the insurance sector and relevant stakeholders in developing an approach to information and data provision which supports accurate risk quantification by insurers
- Detail the steps being taken across jurisdictions to more effectively manage risks in the building sector
- Work with industry to explore what non-regulatory steps can be undertaken to demonstrate change to the insurance industry, such as new codes of practice and professional standards by peak bodies.
Quotes attributable to Minister for Planning Richard Wynne
“The message from the insurance industry is clear: only a national, coordinated approach to the issue will result in real change.”
“The industry needs to work together to ensure the public is safe from combustible cladding and that building practitioners continue to be adequately insured.”