Building surveyors, engineers and architects are now struggling to obtain the insurance they need to do their job, which in turn could seriously affect future building or construction activity, they said.
The group is made up of the Property Council of Australia, Insurance Council of Australia, Ai Group, Australian Construction Industry Forum and Master Builders Australia. It said said that approach to regulatory enforcement and compliance requires a renewed commitment to national action to maintain public confidence in the built environment.
“Though some action has been taken to amend the National Construction Code (NCC) and effectively eliminate the use of many types of combustible cladding on new building facades, the response of state and territory governments to dealing with cladding on existing buildings has been patchy and inconsistent,” they said. “The building, construction, property and insurance industries have continued their calls for state and territory governments to adopt a consistent and best practice regulatory response to the challenges presented by combustible cladding.”
Among the issues cited is the introduction by Australian and international insurers of strict cladding-related exclusions in mandatory professional indemnity insurance products for building practitioners in the building supply chain. They added that discovery of major defects in buildings has significantly reduced the ability of those building owners to find an insurer willing to accept the risk.
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The group also said that state and territory governments have not taken a consistent and comprehensive approach to undertaking and completing audits of existing high-rise buildings with combustible cladding, nor developed a remediation strategy. Furthermore, they said that governments are taking an inconsistent and fragmented approach to implementing reforms described in the Shergold-Weir report. The report. Building Confidence – Improving the effectiveness of compliance and enforcement systems for the building and construction industry across Australia, was released 18 months ago.
Positive action has been taken in some jurisdictions, said the signatories, but other states are lagging and the continued inconsistency in the approach is manifesting in the crisis confronting building practitioners in the building supply chain. “This has led to significant increases in professional indemnity premiums and a reduction in cover via exclusions on combustible cladding and non-conforming building products,” they said.
The organisations said that they urge the federal government to play a leadership role and bring together all state and territory governments to develop and implement a consistent and best practice Australia-wide response for risk assessment and a rectification strategy for existing buildings with combustible cladding with an agreed timetable that reflects the urgency of the issue. This will reduce confusion, clarify the scale of the challenge and support a viable professional indemnity insurance market that provides the coverage needed by industry participants and building owners. It also urged the establishment of a joint government-industry taskforce to oversee urgent and consistent implementation of all Shergold-Weir report recommendations across all jurisdictions.
- The state of Victoria has announced a package worth AU$600m (£335m) to fix buildings with combustible cladding. The grants will fund rectification works on hundreds of buildings found to have high-risk cladding, to make sure they’re safe and compliant with all building regulations. The programme will be overseen by a new agency, Cladding Safety Victoria.
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