Professional indemnity insurance for building industry
In 2019, building certifiers faced significant challenges in acquiring compliant professional indemnity insurance. In response to these issues, the Queensland Government amended the Building Regulation 2006 to permit private building certifiers, for a limited time (until 30 June 2021), to be licensed while holding professional indemnity insurance (PI insurance) with certain cladding exclusions.
The issue of finding compliant and affordable PI insurance continued, and these issues were further compounded by the impacts of the COVID-19 pandemic. In June 2022, the Building Regulation 2021 was further amended to extend the exemption period to 30 June 2023.
These amendments also established transitional provisions to ensure the exemption applied for the duration of the licence provided it was current at the time the exemption period expired. For example, if a licence had been renewed or a new licence issued on, or prior to 30 June 2023 with PI insurance with an external cladding related exclusion, the certifier could continue to work for the duration of the licence (the full 12-month period), with the PI insurance exclusion. However, upon renewal after the exemption period ended, the certifier would then need to hold the prescribed PI insurance.
In late 2022, the Queensland Government engaged PricewaterhouseCoppers Consulting (PwC) to analyse the PI insurance market for building certifiers in Queensland. PWC reported exclusion-free policies are unlikely to be readily attainable and/or affordable after 30 June 2023.
Considering PwC’s analysis (PDF, 448.66 KB) suggested the PI insurance market was unlikely to improve in the short-term, the Building Regulation 2021 has been amended to extend the exemption period for a further two years to 30 June 2025.
The amendments will enable private building certifiers to continue to perform all other private certifying functions, while holding PI insurance with an exclusion relating to work on external cladding. The transition provisions also ensure the exemption applies for the duration of the licence provided it is current at the time the exemption period expires.
The Queensland Government is continuing to work with industry to consider market constraints impacting building industry professionals.