Certifiers sound insurance alarm after Lacrosse ruling

By on 6 March, 2019

Flames engulf the Lacrosse building in Melbourne in November 2014. Image by MFB.

In the wake of the ruling on Victoria’s Lacrosse building fire, the Association of Accredited Certifiers (AAC) has issued a warning to the NSW construction industry over Professional Indemnity (PI) insurance.

Last week a ruling was handed down on the 2014 Lacrosse apartment building fire that occurred in Melbourne awarded $5.7 million in damages to owners of apartments in the building, over extensive damage caused by an inferno of combustible aluminium cladding that shrouded the building’s exterior.

The AAC has issued its warning to the NSW construction industry as insurance brokers Bovill Risk and Insurance Consultants have advised that a major insurer of hundreds of certifying firms would no longer be offering PI insurance policies free of exclusions in relation to combustible cladding.

NSW law states that accredited certifiers must hold PI insurance policies free of exemptions in order to maintain their registration.

Jill Brookfield, CEO of the Association of Accredited Certifiers said that after years of warnings to government, the threat to the NSW construction sector is now immediate.

“We have been highlighting this issue with the NSW Government for two years – this issue cannot wait any longer to be addressed,” Ms Brookfield said.

“The overwhelming majority of homes and buildings constructed in NSW use accredited certifiers in the private sector. “Insurers are now shying away from offering insurance cover for cladding to accredited certifiers and fire engineers,” she said.

The AAC is urging the NSW government to act on their recommendations for improving accountability in the construction industry, reproduced below:

  • All professionals involved in the design, installation and approvals process must be accredited and insured.
  • All key personnel in the process who are not accredited must be licensed and be required to prove their competency at regular intervals.
  • All documents related to the certification of a building should be in a standard form developed by industry and Government.
  • All persons involved in the certification of any engineering design or technical aspect of construction must issue a certificate on a standard form.
  • Comprehensive auditing of all accredited or licensed persons.
  • All parties involved in the building product supply chain need to be accountable for the products they prescribe, specify, purchase and use.
  • Amend the BASIX scheme to allow applicants to design buildings based on predetermined standards.
  • Strengthen the administration of building regulation in NSW by bringing building regulations and control functions into one portfolio, reporting to one Minister.

“The Building Professionals Board must articulate a plan for the likely eventuality that compliant insurance will shortly not be available for any construction professionals, including accredited certifiers,” Ms Brookfield said.

“To date, the Building Ministers Forum (BFM), has not done enough to address this issue – urgent action from government is needed. The industry, builders and owners can’t wait for a national solution.”

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