On and from 1 July 2023 a registered building practitioner under the Design and Building Practitioners Act 2020 (the Act) will need to be adequately insured to perform building work or provide a building compliance declaration.Ìý
Registered building practitioners will need to ensure that they are adequately insured for any work referred to in a compliance declaration given on and from 1 July 2023. This will include any work done before that date relating to that declaration.Ìý
Section 24(1) of the Act states:
(1)ÌýÌý ÌýA registered building practitioner must not -
a) Provide a building compliance declaration to do related building work, or
b) Hold out that the practitioner is adequately insured with respect to the provision of the declaration or doing the work unless the practitioner is adequately insured with respect to the declaration and work.Ìý
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Clause 75 of the Design and Building Practitioners Regulation 2021 states:Ìý
(1)ÌýÌý ÌýFor the purposes of section 24(2)(a) of the Act, a registered building practitioner must be indemnified under an insurance policy, whether a professional indemnity policy or otherwise, that complies with this clause.
(2)ÌýÌý ÌýAn insurance policy must, in the reasonable opinion of the registered building practitioner concerned, provide for an adequate level of indemnity for the liability that could be incurred by the practitioner during the practitioner’s work.
(3)ÌýÌý ÌýIn determining whether a policy provides for an adequate level of indemnity, the practitioner must consider the following matters:
a)ÌýÌý Ìýthe nature and risks associated with the work typically carried out by the
practitioner,
b)ÌýÌý Ìýthe volume of the work typically carried out by the practitioner,
c)ÌýÌý Ìýthe length of time that the practitioner has been registered,
d)ÌýÌý Ìýa reasonable estimate of claims that could be brought against the practitioner
based on paragraphs (a)–(c),
e)ÌýÌý Ìýthe financial capacity of the practitioner,
f)ÌýÌý Ìýany limits, exceptions, exclusions, terms, or conditions of the policy
We recommend that you consult with your insurance broker. Otherwise, you can contact Master Builders Insurance Brokers for further questions.Ìý
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