Building practitioners across the supply chain face challenges in obtaining the insurance required to maintain their registration and perform their work, five key industry lobby groups say.
In a joint statement, Australian Construction Industry Forum, Australian Industry Group (Ai Group), Insurance Council of Australia, Master Builders Australia and the Property Council of Australia says that a lack of action on building reform following the crisis in respect of cladding has led to a situation whereby practitioners such as architects, engineers and building surveyors are facing hefty increases in professional indemnity insurance and are struggling to secure the insurance they require for registration.
The call comes as the building surveyor profession has been thrown into a state of chaos and uncertainty following a decision by the only remaining insurance underwriter who offered insurance without cladding exclusions to cease to do so.
As well, building surveyors have found their insurance premiums have been going through the roof, with many certification firms facing increases in insurance premiums which are fivefold or more.
In their statement, the groups says that groups such as architects, engineers and building surveyors are facing strict cladding-related exclusions in professional indemnity insurance products which they are required to hold as part of their registration.
This has happened as the discovery of significant defects in buildings (particularly cladding) has reduced the ability of building owners and practitioners to find insurers who are willing to accept the risk.
(Such issues are likely to be further magnified with the emergence of cracking across a number of inner urban apartment buildings.)
State and territory governments have not taken a consistent and comprehensive approach to undertaking and completing audits of existing high-rise buildings with combustible cladding, nor developed a remediation strategy.
As well, Governments are taking an inconsistent and fragmented approach to implementing reforms described in the Shergold-Weir report which was released 18 months ago.
“Australia’s fragmented approach to regulatory enforcement and compliance with building regulations requires a renewed commitment to national action to maintain public confidence in our built environment …,” the groups said in their statement.
“… Though some action has been taken to amend the National Construction Code (NCC) and effectively eliminate the use of many types of combustible cladding on new building facades, the response of state and territory governments to dealing with cladding on existing buildings has been patchy and inconsistent.
“The building, construction, property and insurance industries have continued their calls for state and territory governments to adopt a consistent and best practice regulatory response to the challenges presented by combustible cladding.
“Positive action has been taken in some jurisdictions, however other states are lagging and the continued inconsistency in the approach across governments is manifesting in the crisis confronting building practitioners in the building supply chain. This has led to significant increases in professional indemnity premiums and a reduction in cover via exclusions on combustible cladding and non-conforming building products.
“Building surveyors, engineers and architects are now struggling to obtain the insurance they need to do their job, which in turn could seriously affect future building or construction activity.”
In terms of action, the groups want the Federal Government to Develop and implement a consistent and best practice Australia-wide response for risk assessment and a rectification strategy for existing buildings with combustible cladding with an agreed timetable that reflects the urgency of the issue.
The groups also want the government to establish a joint government-industry taskforce to oversee urgent and consistent implementation of all Shergold-Weir report recommendations across all jurisdictions.
Without action, the groups say that consumers, building owners, building practitioners and their insurers will not have certainty and confidence in building regulation.
This, they say, would also have flow through implications on the economy as the building and construction sector employs roughly one in ten Australians.
“The entire building and construction supply chain risks being further impacted by this continued uncertainty, and industry participants want to work cooperatively with governments to rebuild that confidence.”
“We urge the Commonwealth, State and Territory governments to work together in providing certainty through a uniform national approach to dealing with these matters.”