Building Act Amendments – builders risk insurance and director liability Proposed changes to the Building Act 2004 will make changes that are major to pre contract disclosure by building contractors undertaking residential works. The licensing of builders under the Licensed Building Practitioners scheme will remain voluntary; however as from one March 2012 building practitioners will have to be licensed to carry out restricted building work. As from that date unlicensed building practitioners will have to engage a licensed building practitioner to either carry out or perhaps supervise restricted work. Just before entering into a construction contract a prospective building contractor will be expected to offer the consumer with info of the skills, qualifications and the license status of people who’ll undertake the work.
All licensed building practitioners undertaking restricted building works will thus have to revisit the basis of their professional indemnity insurance. Particularly, licensed building practitioners who’re principals of small-to-medium entities should assess the risk of theirs and also the scope of any professional indemnity insurance just where they’re providing the building service, or perhaps supervising others undertaking restricted building works.
Surety schemes and builders risk insurance can also be asked to offer the customer with a declaration of what, if some, surety or insurance backing can be obtained to cover the expense of fixing any faults arising from the building works(assuming that a building contractor is not able to satisfy the new remedy obligations). Financial surety schemes for example a guarantee or perhaps home warranty insurance product aren’t currently mandatory. This disclosure requirement is apt to see increased demand for related insurance products and surety.