Do building certifiers, surveyors, quantity surveyors and building designers need professional indemnity insurance?

Do building certifiers need professional indemnity insurance?

Queensland building certifiers

In Queensland, a building certifier has to hold professional indemnity only with a private certification endorsement. The insurance is a condition of that endorsement being made. Evidence of it is required each time a licence carrying the endorsement is renewed.

QBCC sets the minimum at $1 million for any one claim and in total in any one period. Costs and expenses sit on top of that. The policy also needs at least one automatic reinstatement, which restores the limit for a later claim once an earlier claim has used it.

One exception has an end date. Until 30 June 2027, a private certifier does not need cover for private certifying functions directly related to non-compliant external cladding. QBCC has extended that exemption before, and it can simply expire. An exempted licence granted before then remains valid until it expires.

New South Wales certifiers

What limit do you need to stay registered in New South Wales? At least $1 million for any one claim, with a further 20 per cent on top for relevant expenses: the cost of investigating a claim and the legal cost of defending or settling it.

For the year, an individual needs at least $1 million with those expenses outside the limit, or $2 million with them inside it. A firm needs that individual figure for each of its registered directors, partners and employees, up to $20 million in all. Your policy must also cover your work back to when you first became a registered certifier, or were first accredited before that.

I'm a building surveyor or inspector in Victoria. What do I have to hold?

Victoria sets the duty by registration category, and building surveyor and building inspector are both categories that must carry professional indemnity. Whichever way the limit is set, the policy needs at least one automatic reinstatement.

Take on a council's municipal building surveyor work and the figure rises. Before you enter that agreement with the council, you need at least $5 million for any one claim and for all claims in the period.

I'm a surveyor in Queensland. Do I need cover?

Cover is one of the conditions for getting the consulting surveyor endorsement, and a corporation applying for registration must show evidence of it. The Surveyors Act does not require a registered surveyor with no consulting endorsement to take out cover personally, nor an employed surveyor covered by the employer's policy.

A corporation renewing its registration needs $2 million, the figure the Surveyors Board of Queensland sets.

What does a quantity surveyor have to hold?

That is at least $1.5 million with defence costs inside the limit, or $1 million plus $500,000 with them outside it, with the same reinstatement. In another state, what applies depends on that state's scheme and on what your contracts ask for.

Do building designers need professional indemnity insurance?

In Queensland, the building design licence classes, low rise, medium rise and open, each carry a $500,000 minimum set by QBCC.

In Victoria, a draftsperson registered in building design, in the architectural, interior or services class, must carry it too, at the same minimums as building surveyors, inspectors and quantity surveyors.

In New South Wales, insurance is a condition of registration for a design practitioner, and it must be a professional indemnity policy, with no dollar figure set. For building practitioners, the builders under the scheme, the rules allow "an insurance policy, whether a professional indemnity policy or otherwise". Until 30 June 2027, a registered building practitioner is exempt from that requirement when providing a building compliance declaration or doing building work in relation to one.

Which QBCC licence classes, including fire protection, need professional indemnity insurance?

The fire alarm systems class is the one class that may instead hold public and products liability of at least $5 million. A builder or trade contractor usually needs cover for the works and the site instead: construction insurance or trades insurance.

A director or employee of a licensed company, or a partner in a licensed partnership, meets the requirement when the company or partnership holds the cover.

Where cover is not available, or would be economically unviable given its cost and the business's turnover, QBCC may waive the requirement. A waived licensee must then tell a consumer in writing, before entering a building contract, that it was waived and what cover they do hold.

What should you check when you compare quotes against these minimums?

The rules above count defence costs in different ways. QBCC wants a Queensland private certifier's costs and expenses on top of the limit. New South Wales adds 20 per cent for relevant expenses. Victoria sets one figure with defence costs inside the limit and another with them outside.

The policies differ as well. Of the design and construction wordings we place, one pays defence costs in addition to the limit. Another counts them inside the limit. Not every wording we place carries an automatic reinstatement.

What we check: the costs basis and the reinstatement your class asks for, on the schedule, the pages that list what your policy includes, before you sign. Victoria's two orders side by side, the New South Wales design practitioners scheme and the cladding exclusion a compliant policy can still carry are on our professional indemnity for engineers and design professionals page.

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