There are changes to professional indemnity (PI) insurance for Certifiers

The Building and Other Legislation Amendment Regulation 2019 commenced on 9 August 2019, introducing amendments to the professional indemnity (PI) insurance for private certifiers relating to non-compliant external cladding.

Private certifiers must continue to hold the required PI insurance.

However, from 9 August 2019 to 30 June 2021, the required PI insurance may contain an exclusion for non-compliant external cladding.

The required PI insurance must not contain any other exclusion that may extend past the definition below; for example other non-conforming building products. Please take care to read your policy documents and ensure that any insurance you obtain doesn’t extend past the allowable exclusions.

What this means for certifiers

  • There are changes to PI insurance.
  • During the period 9 August 2019 to 30 June 2021, private certifiers do not require PI insurance coverage for performing private certifying functions directly related to external cladding or the use of external cladding that does not comply with any of the following:
    • an Act or other law of the Commonwealth or a State;
    • an Australian Standard;
    •  the BCA.

External cladding means cladding or a cladding system:

  • forming part of, or attached or applied to, an external wall or other external part of a building other than a roof; and,
  • made, in whole or in part, of composite material.

The Certifier licence application forms have been amended to reflect the changes.

FAQs

Does that mean I don’t require PI insurance now?

A building certifier seeking endorsement as a private certifier still needs to have professional indemnity insurance to be eligible for a licence.

Can my PI insurance be in the name of my company or does it have to be in my individual name?

Where you are an employee or member of a company, you must provide the QBCC with evidence of the relationship that exists between you and your employer or company. You must also provide a certified copy of your employer’s or company’s professional indemnity insurance policy.

If my PI Insurance excludes external cladding what does that mean for me?  Can I hold PI Insurance with cladding exemptions and still undertake work directly related to non-compliant external cladding?

Yes, as a licensee you may carry out building certifying functions relating to all types of external cladding.  While professional indemnity insurance cover can assist you in the event you are the subject of legal action, all insurance policies are the subject of exclusions from cover.  So you won’t be protected under your PI insurance for work that falls under an exemption, such as certifying non-compliant external cladding.  Consider seeking legal advice to help you better understand the risks involved for your business.

Do I need to advise my clients if I don’t hold PI insurance for non-compliant external cladding?

You should check your contracts, terms of trade and if necessary consider seeking legal advice.

Why does this apply only until 30 June 2021?

This is the timeframe set by the Building and Other Legislation Amendment Regulation 2019.

Can I hold PI insurance with other exclusions?

No. A building certifier seeking endorsement as a private certifier must have professional indemnity insurance for all other certifier activities. Please take care to read your policy documents and ensure that any insurance you obtain matches the allowable exclusions.