Flammable cladding-related insurance policy exclusions may force fire engineers and building surveyors out of business. Such exclusions are increasingly being inserted by insurers in the wake of recent fires at the Lacrosse and Neo 200 buildings. However, building regulators will not register surveyors and fire engineers if their professional liability insurance policies contain such exclusions. Policy premiums for fire engineers and building surveyors are also being increased, leading for calls for governments to step in and bridge the insurance gap. From The AFR:
As a wave of industry PI renewals becomes due over the second half of this year, the risks are clear for the construction industry in all states.
“If building surveyors are no longer able to practise, the end result will be the Victorian building industry rapidly grinding to a halt,” said Melbourne-based lawyer Hubert Wajszel…
One resolution would be for governments to step in where the market failed, Mr Wajszel said.
“As a reflection of the government’s powers to regulate the building industry, [an] option would be for it to create a statutory insurance scheme providing coverage for claims arising out of building surveyor’s conduct,” he said.
Earlier this month, Geoff Hanmer – Adjunct Lecturer in Architecture at UNSW – warned that legal costs pertaining to the estimated 1,000 buildings with flammable cladding could top $1 billion, with taxpayers potentially on the hook.
Now taxpayers may potentially have to cover the industry’s insurance claims as well. What a mess.