The building surveyors’ PI insurance crisis may soon impact councils

LG Leader December 2019

Over the past year, the professional indemnity insurance crisis facing private sector building surveyors (i.e. private certifiers registered under the Development Act 1993) has made national headlines.  The crisis has arisen from a number of high profile, expensive legal cases where building surveyors and other professionals have been sued for defective building work including combustible cladding.

As a result of these cases, PI insurance premiums for building surveyors have increased exponentially and, interstate, private certification firms have begun to cease operating as the costs of PI insurance has become prohibitive.

The impacts of the PI insurance crisis may soon be felt by councils.  If private certifiers in South Australia are unable to afford PI Insurance, they will not be able to maintain their registration and will not be in a position to grant Building Rules consent. This may cause the number of Building Rules applications lodged with councils to increase significantly.

The question to be asked is how ready is your council to deal with increased numbers of Building Rules applications?  With numbers of appropriately-qualified building surveyors dwindling, many councils rely on consultants to process current numbers of Building Rules applications and will not be able to cope with large increases in Building Rules applications.

We encourage councils to carefully consider their current resourcing in this area, what further resources may be required to deal with increased numbers of Building Rules applications and whether resource sharing or other arrangements should be put into place in anticipation of increased resource demands.

For further information please contact Victoria Shute on vshute@kelledyjones.com.au or (08) 8113 7104