The NSW Department of Customer service has accepted the application of an insurance provider to offer 10 years of protection for residential apartment buyers, making New South Wales the first state to offer such product.
The application was made by Resilience Insurance, whose product will be as a form of security under the Strata Building Bond and Inspections Scheme.
Minister for Fair Trading Victor Dominello said this is a big win for apartment owners and body corporates.
“Decennial liability insurance provides those living in residential apartment buildings with comprehensive consumer protection for building defects caused by substandard design and building work,” he said.
"It also provides an insurance safety net for consumers that is currently lacking in residential apartment buildings.”
Decennial liability, as Mr Dominello puts it, gives power to buyers and body corporates who will no longer need to prove liability and will only have to demonstrate the damage for assessment.
“For the first time in Australia, this will ensure building owners have access to a timely and straightforward remedy to remediate those defects."
Under a decennial liability insurance scheme, developers or builders would take out a policy to cover any potential costs by an owner to fix serious defects of critical building elements for up to 10 years.
The policy will cover critical parts of a building’s common property, including the structure, fire systems, and waterproofing.
This is intended to provide an insurance of first resort, allowing building owners to make a claim as soon as a defect is identified.
NSW Building Commissioner David Chandler said the introduction of the decennial liability insurance is part of the changes that would benefit the building industry, as it would encourage the improvement of design and construction of apartment buildings in NSW.
“These reforms have come about due to the united commitment of government and industry to transform the NSW construction sector.
“NSW is now in the position of being a national leader in offering an insurance product of this type for Class 2 buildings because of the three years of conscious effort and commitment by Government and industry to the journey we have been on under Construct NSW.
“We’re looking to clean up the market and bring an end to expensive litigations against developers who have deep pockets or subsequently vanish into thin air.”
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