The building certifier insurance crisis
Building projects around the country face delays as building certifiers struggle to renew their insurance in the wake of recent apartment block disasters.
Still reeling from a series of news reports about substandard apartment developments in Sydney, the building industry is facing another crisis as certifiers struggle to renew their professional indemnity insurance.
This problem is compounded by fears that Australia could face a high-rise fire similar to the Grenfell Tower disaster in the UK as potentially dangerous cladding has recently been discovered in several Melbourne apartment blocks.
Denita Wawn, chief executive officer of Master Builders Australia, estimates that about 30 per cent of building certifiers and surveyors in Australia are struggling to renew their indemnity insurance, as insurers impose harsh exclusions or ramp up premium rates.
“The problem is already causing delays to building projects across the country and will only get worse as more insurers withdraw from the market,” she says.
Master Builders Australia has suggested a number of initiatives which it believes will resolve the issue, such as establishing a national pool of qualified engineers to sign off on high-risk components.
The organisation is also lobbying for the speedy implementation of the Shergold-Weir Building Confidence Report. Commissioned after the 2017 Grenfell Tower tragedy, the Australian report makes a number of recommendations, including a code of conduct for building surveyors, greater oversight of private building surveyors and a national registration system for all building practitioners.
In July, state and federal governments agreed to pursue national building standards, but response to the cladding issue remains piecemeal. The Victorian government has pledged $600 million to fix its cladding crisis, while New South Wales is still looking at its options – apart from the question of flammable cladding, the state government is also dealing with forced evacuations of residents from new apartment blocks in Zetland, Mascot and Sydney Olympic Park.
As part of the agreements between the Commonwealth and the states, a new taskforce is to be established and will prioritise the implementation of the 26 recommendations of the Shergold-Weir Building Confidence Report.
While this latest review gets underway, NSW Premier Gladys Berejiklian says her government will push ahead with implementing the reforms outlined in its Building Stronger Foundations discussion paper. These include an industry-wide common law duty of care, possible deregistration for negligent builders (and others), builder declarations of compliance with the Building Code of Australia, and a new commissioner to oversee regulations.
The Australian Institute of Architects has welcomed the NSW initiative, but it believes more needs to be done to address poor procurement processes that have resulted in the use of poor quality or inappropriate building materials. Kathlyn Loseby, the institute’s NSW president, says that not only did such decisions come at the expense of quality and safety but owners could face expensive maintenance and remediation bills further down the track.
Respected companies already supply a wide range of certified non-combustible high-quality building products. Brickworks’ Austral Precast and Terraçade products have all been approved for residential, civil and commercial construction in Australia. Other non-combustible building product materials include masonry blocks and bricks, both of which have excellent fire resistance properties.
“Increasing quality may increase the construction costs and time,” says Loseby, “but evacuating people from an unsafe building costs substantially more and takes longer to fix – as does stakeholder confidence.”