by Ericka Pingol
Unsafe cladding could spark an insurance crisis in the building sector, experts say.
The Victorian Building Authority (VBA) requires professional indemnity insurance, without exemptions. The rules also apply in New South Wales and Queensland. However, companies are unable to provide this option and the industry is worried building works may simply cease.
According to The Master Builders Association (MBA), 30% of building surveyors must renew their insurance by the end of June.
The MBA said in a statement that if surveyors were unable to get insurance, or the insurance offered to them is non-compliant due to imposed exclusions, many building projects would come to a halt.
Victorian Premier Daniel Andrews is aware of the issue, saying that the state had taken the role of insurer of last resort in the past for other sectors.
The problem, Andrews said, is not isolated in Victoria.
“The feds should be involved, that would be good, but we won't let anybody be uninsured. There are some steps we can take,” Andrews said.
Building surveyors confirmed that Landmark Underwriting, the last agency to cover cladding, will halt such coverage in July. The move will result in building surveyors being unable to find appropriate insurance once policies expire, obliging businesses to shut down operations.
Talking to ABC Radio Melbourne, Andrews announced that taxpayers would contribute to address the issues. He added that new laws would crack down on phoenix companies that set up for the sake of a single project.
Victoria is also setting up Cladding Safety Victoria—a dedicated authority to deal with the turmoil.
