Certifiers temporarily permitted to have cladding exclusion on insurance

Certifiers temporarily permitted to have cladding exclusion on insurance

The NSW Government has amended the Building Professionals Regulation to ensure that building certifiers can continue to operate.

Certifiers are required by NSW law to hold professional indemnity insurance, without exclusions or conditions, as a pre-requisite for accreditation, this is similar to the requirements in all other states and territories. The insurance is required to cover their past and current activities as a certifier.

Advice to the NSW Government confirms that all providers of professional indemnity insurance for certifiers in Australia have now confirmed they will change their policies so that new policies entered into from July 2019, will exclude indemnity for certifiers on work that relates to non-compliant and non-conforming cladding in building work.

In order to allow the Building Professionals Board to accept Professional Indemnity insurance policies with conditions or exclusions, the NSW Government has removed the requirement that would otherwise make the policy non-compliant and prevent certifiers from being accredited to provide services.

Certifiers are permitted to hold professional indemnity insurance with a policy exclusion related to external cladding, provided:
• the policy commences on or before 30 June 2020;
• the policy does not exceed 12 months.

Key points from the Building Professionals Board:
• This is a temporary measure for policies offering coverage up to 30 June 2021.
• The permitted exclusion relates only to cladding as defined in the amended regulation.
• A broad exclusion, such as for all non-compliant or non-conforming building products and materials, is not compliant.
• It is strongly encouraged that certifiers make all reasonable attempts to seek insurance with coverage that limits their exposure to the greatest extent possible.

The NSW Government will closely monitor the situation to ensure that there are no adverse outcomes for consumers or certifiers from the change to professional indemnity insurance policy exclusions.

Minister for Better Regulation and Innovation, Kevin Anderson – “Statement on NSW Certifiers Insurance”
https://www.finance.nsw.gov.au/about-us/media-releases/statement-nsw-certifiers-insurance

Building Professionals Amendment (Insurance) Regulation 2019

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