State and territory governments must take a nationally consistent and collaborative approach to resolving the building and construction sector crisis.
The Insurance Council of Australia (ICA) said all states and territories must accept and urgently implement all 24 recommendations in the Shergold-Weir Building Confidence report, which revealed significant systemic deficiencies within the building industry and with compliance and regulation.
ICA general manager for risk and disaster planning Karl Sullivan said the state-by-state approach to solving building industry issues was too disjointed and inefficient.
“The building certification regime in many jurisdictions is flawed,” he said. “This is a national issue and requires national consistency, which is the public position the Insurance Council took when cladding issues arose following the Grenfell Tower tragedy.
“Recent events show the construction industry’s problems go far deeper than the use of flammable cladding and other non-compliant materials.
“Current risk-management regimes in construction are clearly failing to prevent avoidable and significant losses. Partial and piecemeal fixes by governments are not going to restore public and insurer confidence in the construction sector.”
Sullivan said failure to adopt a consistent approach to detecting and rectifying flammable cladding was causing insurers to reassess the pricing and availability of professional indemnity (PI) insurance for building certifiers and other building professionals.
He said the ICA and its members had been consulting state governments on cladding and other building industry issues for more than two years.
As part of this process the ICA has developed a Residual Hazard Identification Protocol to help building owners and experts evaluate the risks posed by the use of flammable cladding and other non-conforming building products.
Master Builders CEO, Denita Wawn, said unaffordable premium increases for building certifier professional indemnity renewals has led to projects across the country being delayed.
“The problem is already causing delays to building projects across the country and will only get worse as more insurers withdraw from the market,” she said.