| 31 October 2022

Reminder for engineers to review insurance coverage in NSW

As a registered professional engineer or registered design practitioner working on buildings in NSW you will now need to review your insurance coverage.

From 1 July 2022, registered professional engineers and registered design practitioners must meet the insurance requirements of the Design and Building Practitioners Regulation 2021 (NSW).

Under Part 6 of the Regulation, a practitioner must hold the ‘reasonable opinion’ that their professional indemnity (PI) insurance policy provides ‘an adequate level of indemnity for the liability that could be incurred by the practitioner or professional engineer in the course of their work’ under the Design and Building Practitioners Act 2020 (NSW).

Engineers Australia as well as Consult Australia is concerned this insurance requirement is very difficult to comply with – especially for practitioners who rely on their employer’s PI cover.

A business’ insurance policy is a commercial-in-confidence document that employees generally do not see. Further, you cannot ever guarantee what insurance product will be offered to you in the current insurance market.

We also await the insurance industry’s response to the recent Goodwin Street Developments case in the NSW Supreme Court. This case found an individual liable under the Act’s duty of care, with the judge noting the duty extends beyond just class 2 buildings to apply to any building.

Consult Australia and Engineers Australia were successful in securing a 1-year exemption from the insurance requirement, but this expired on 30 June 2022.

Throughout 2022 both Consult Australia and Engineers Australia have been asking the NSW government to reconsider the obligations in the Regulation and our work with the NSW government is ongoing, however in the interim, we suggest:

  • If you are an employee, contact your employer to obtain the prescribed details about what policy covers your work and decide if it meets the requirements in the Regulation;
  • If you are a business owner, contact your insurance provider to check your current policy coverage and provide your employees with the prescribed details;
  • Advise Consult Australia and Engineers Australia of any potential coverage issues you have;
  • Contact Hon. Victor Dominello, NSW Fair Trading Minister to have the Regulation reviewed, see the NSW Government website for more information;
  • Contact the NSW Small Business Commissioner if you are a small business impacted by this regulatory requirement;
  • Make sure you are prepared by carefully reviewing the information published by NSW Fair Trading.

These requirements relate to Clause 77 ‘Certain registered practitioners to determine adequate coverage of policy’ and Clause 78 ‘Practitioners must keep records relating to adequacy of policy’ of the Design and Building Practitioners Regulation 2021 (NSW).

Contact us

Engineers Australia: [email protected]

Consult Australia: [email protected]