Solution announced to PI insurance cladding crisis

3 July 2019

Master Builders is pleased the government has heeded our calls for a change in the rules for licensing building certifiers. The Minister announced this week that building certifiers will be allowed to have an exclusion on their professional indemnity insurance for combustible cladding.

This is an important reprieve for private certification and should help the majority of the industry (largely the housing sector) which is not affected by the cladding problems caused by the use of aluminum composite panels (ACP’s).

The ball is now back in the court of insurance companies who should now be in a position to offer insurance that meets the certifiers’ licensing requirements.

There will be ongoing problems for those working on Class 2 -9 buildings where they will continue to need to work with ‘combustible’ cladding in some form. With the insurance industry unwilling to cover combustible cladding, we will continue to work with the government to identify a new way to indemnify the certification of this work.

Industry also needs an answer for existing buildings identified with ‘combustible’ cladding, as the owners and builders will no longer have the certifier’s PI insurance to call on in many cases.

The Minister’s announcement also included details of a ban on ACPs panels with a PE core of 30% or more on all new buildings.

For new buildings, Master Builders supports a ban as it is in line with the current rules under the NCC for the use of combustible materials.  For existing buildings where ACPs have been used, it is important to acknowledge that they can be made safe by way of a performance solution.

The Minister also called for a national ban on the importation of ACPs with a PE core. Master Builders has some concerns with this step as there are safe and compliant uses for these products – for example signage. The use of ACPs is better controlled by the measures that focus on how they are used in buildings.

What you should do

You need to check-in with your certifier now to see where they are tracking for their PI insurance renewal: especially for any projects that are currently underway.

For more information, read the PWC interim report.

Major Sponsors

BUSSQ Bluescope QLeave Bluescope