PI availability threatens industry
Australia’s building industry faces a potential crisis.
Building industry professionals are having great difficulty obtaining professional indemnity (PI) insurance in light of mixed reactions across state, territory and federal governments to the building industry’s woes.
PI availability is hampered by insurer capacity, high premiums and excesses, and limitations on cover.
The problem affects many aspects of engineering and construction design. Ferm Engineering CEO Steve Burton said there was a “black hole” for certifiers and other industry professionals seeking PI insurance and governments and regulators were not providing solutions. Continuity of coverage was a real concern.
Remediating flammable cladding and use of non-conforming building products are just two issues creating angst across the nation’s building industry and fuelling the PI problem.
Engineers can solve the industry’s problems but are suffering front-line costs because of PI premium increases.
In October, Insurance News reported that the Australian Institute of Building Surveyors said surveyors involved with projects of more than three storeys were unable to secure PI cover.
On 4 November, Insurance News reported that one of Qld’s largest building certifiers was unable to obtain PI coverage.
A solution is required to ensure the building industry’s long-term sustainability.
Projects will be delayed or won’t proceed if PI insurance is unavailable to industry professionals, so the insurance, building and engineering industries need to resolve the crisis promptly.
Click here to read Ferm Engineering’s media release issued mid-year about the PI problem.
Steve says unfortunately some insurers are reluctant to accept performance engineering solutions to flammable cladding on buildings, instead requiring the more expensive option of full removal.
In June 2019, PwC delivered a report to the Qld Government outlining the issues. Click here to read it.
The Qld Building and Construction Commission requires building owners who have to complete its combustible cladding checklist to engage fire engineers. Click here to read more.