Update: Exemption Extended to 1 July 2026
The NSW Government has extended the exemption for Professional Indemnity (PI) insurance requirements to 1 July 2026. This means registered building practitioners now have an extra 12 months to prepare before cover becomes mandatory from 1 July 2026.
The rule applies to those registered under the Design & Building Practitioners Act (DBP Act) — particularly builders involved in Class 2 buildings (multi-unit residential) or offering Design & Construct (D&C) services.
Why Professional Indemnity Matters For Builders
Builders may only do construction work, but they can still face Professional Indemnity claims — not for the manual work itself, but for things like misinterpreting plans, failing to pass on design changes, or errors made by subcontracted professionals. Even informal advice or coordination on site can lead to claims, which is why PI cover is still important.
This is not to be confused with Public Liability cover, which deals with on-site injuries or damage. PI comes into play when someone claims your professional input cost them money.
Some real-world examples include:
- You followed the engineer’s plans, but something went wrong — and you’re blamed for not questioning it.
- You forgot to pass on a design change, and the work didn’t meet compliance.
- You gave informal advice on a material, and it turned out to be the wrong choice.
- You relied on a certifier or consultant, but their mistake dragged you into the claim.
- You signed off on a fix during the build, and it failed later — costing the client money.
PI claims often surface long after construction is complete, and legal costs alone can be significant, even if you’re ultimately cleared.
Why the Rules Are Changing
The tightening of PI requirements is part of the NSW Government’s broader push to rebuild confidence in the construction industry. After years of high-profile building defect cases, there’s now greater emphasis on accountability and compliance.
Builders now carry a statutory duty of care under the DBP Act. This means a property owner can sue for negligence up to 10 years after the work is done, making long-term protection essential, not optional.
What You Need to Do Before July 2026
- Confirm whether your business is captured under the DBP Act.
- If you’re involved in Class 2, D&C, or managing design inputs, PI will soon be non-negotiable.
- Review your existing PI policy — is it up to date, and does it reflect the scale and complexity of your current work?
- If you’re uninsured, now’s the time to start speaking to a broker.
- Keep evidence of your coverage ready — regulators and clients may request it as part of due diligence.
How Be Covered Can Help
We get it — not all builders do design, but that doesn’t mean you’re off the hook.
At Be Covered, we understand that PI insurance isn’t one-size-fits-all. Whether you’re hands-on with design or purely focused on construction, we tailor your cover to suit the real risks you face.
We work closely with:
- Construction-only builders
- Design & Construct builders
- Owner-builders and developers
- Builders stepping into project management or design coordination
- Contractors expanding their role under the DBP framework
We don’t just hand you a policy. We look at your contracts, listen to your plans, and make sure your PI cover actually reflects what you do — not just what’s on your business card.
Need Help? Start with a Conversation
If you’re not sure where you stand or just want a second opinion on your cover, get in touch with us. We are here to help you stay compliant, protected and ready long before the 2026 deadline.
