As New South Wales rolls out reforms in the construction industry, the state is considering whether decennial liability insurance provided by the private sector could fill the gap between smaller residential builds and commercial building insurance. Construction legal expert Jessica Rippon believes it would be a win-win for both owners and developers.

After more than two years of intensive investigation, review and legislative reforms in construction, the New South Wales State Government has announced it is creating a ministerial advisory panel that will consider introducing a new type of insurance cover — decennial liability cover (DLI) — for new multi-storey apartment buildings.

Unlike the Home Building Compensation Fund (HBCF), which covers residential properties of less than three stories and is managed by the government’s Insurance and Care NSW (icare), DLI would be provided by the private insurance sector.

WHAT IS DECENNIAL LIABILITY INSURANCE?

While DLI is new to Australia, it’s used successfully in more than 30 countries worldwide, including France, United Arab Emirates, Sweden and Canada.

‘DLI is taken out by developers when a project starts, to cover potential serious defects which arise up to 10 years after completion,’ explains a NSW Fair Trading spokesperson.

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