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Starting 1 July 2025, registered building practitioners in NSW are required to hold professional indemnity insurance to carry out their work legally.
Following a change in regulation under the Design and Building Practitioners Act 2020, NSW building practitioners must hold adequate professional indemnity (PI) insurance from 1 July 2025.
Currently, the legislation doesn’t specify a minimum cover amount, leaving it up to building practitioners to secure PI insurance they reasonably consider sufficient for the risks and liabilities associated with their work.
Under the new Design and Building Practitioners Act 2020, NSW builders are required to hold a PI insurance that adequately protects against potential liabilities arising from their work.
The new requirement complements existing home building compensation cover, adding an extra layer of protection for both builders and consumers.
Head of customer acquisition at BizCover, Daniel Quinn, warned that building practitioners without PI insurance risk being caught out by the upcoming legal changes.
“This isn’t just about ticking a compliance box,” Quinn said.
“It’s about protecting your business’s future, profitability and reputation, as well as your clients.”
Quinn said that under the Design and Building Practitioners Act 2020, NSW builders are required to have a “duty of care” during construction work.
He said the duty of care aims to prevent financial loss to current and future land owners from building defects and applies retrospectively, with claims allowed up to 10 years after completion.
“Professional indemnity cover can help to provide protection against risks related to professional services and advice,” he said.
Introduced in June 2024, the mandatory PI insurance requirement was delayed to allow practitioners and insurers to ensure suitable products and sufficient choice were available.
BizCover said that PI coverage for registered building practitioners ranges from $250,000 to $10 million, accommodating businesses with annual revenues up to $10 million.
“It’s always important to regularly review your insurance to make sure it’s still fit for purpose. But there is an added impetus for NSW building practitioners to review theirs before the 1st of July deadline.”
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