The introduction of apartment buyers’ insurance
The NSW Government is taking another significant step to better protect off-the-plan apartment buyers with the announcement of a decennial liability insurance (DLI) into the Australian market.
DLI is a special type of insurance taken out by the developer to guarantee against major defects for up to 10 years. A DLI policy would cover potential serious defects which arise up to 10 years after a project’s completion giving confidence to consumers to buy into multi-unit residential construction in NSW.
The introduction of DLI would also tackle the illegal practice of phoenixing as only developers who demonstrate a commitment to a long-term market presence will be able to acquire an insurance policy.
Insurers will be assessing developers’ rating score, their corporate governance and balance sheets. While good quality work will be underwritten, poor quality developers will find themselves out of the market.
A specialist Ministerial Advisory Panel has been set up to advise on the insurance’s introduction into the market. The Ministerial Advisory Panel draws on expertise from key construction industry stakeholders, insurers, strata bodies and representatives from the NSW Government. It is expected the Panel will report back to Government with options stemming from its investigations next year.
Members of the DLI Ministerial Panel include:
- Gary Dransfield – Past President, Insurance Council of Australia
- Michael Bennett – General Manager, Property & Construction Finance, Commonwealth Bank of Australia
- Albert Chan – Executive Director, Meriton Group
- Michael Corcoran – Co-founder and Executive Director, Solido Development Finance
- Chris Duggan – President, Strata Communities Association (NSW)
- Stefan Hicks – Founding Director, SHC Insurance Brokers,
- Chris Kelly – Construction Manager, Billbergia
- Darren Maher – Chief Underwriting Officer, IAG
- Steve Mann – Chief Executive Officer, Urban Development Institute of Australia NSW
- Corey Nugent – Senior Operations Manager, Insurance Council of Australia
- Fabrizio Pirelli – Chief Executive Officer, TOGA Development
- Jessica Rippon – Principal Solicitor, Construction Legal, representing the Owners Corporation Network
- Nicholle Sparks – General Manager, Frasers Property Australia
- David Tanevski – Managing Director, KWC Capital Partners, and Founding Director, Urban Taskforce
October 2021
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