Building crunch feared

Rising insurance premiums hurt industry

QUEENSLAND’S $50 billion construction sector could grind to a halt as building certifiers “drop like flies” out of the industry amid a growing insurance premium crisis.

Cornerstone Building Certification director Chris Easton said certifiers, who vouch for building standards, were facing exorbitant premiums on their public indemnity insurance amid the fallout of recent building disasters including London’s Grenfell Tower disaster.

“You will see certifiers dropping like flies and walking away because premiums are too expensive,” Mr Easton said.

“Certifiers may not be the biggest cog in the wheel in construction but if we can’t perform our function the industry will grind to a halt.”

Earlier this week, Virginiabased Building Certification Group said it had stopped certification work on more than 1000 projects worth more than $100 million because it could not get an insurer to provide public indemnity insurance.

Mr Easton said a claim that one certifier had experienced an annual premium increase from $10,000 to $20,000 was understating the size of the problem.

He said his company’s own public indemnity insurance had gone from $15,000 for a 12month period to $194,000 for 18 months. This included a $250,000 excess for claims related to building cladding. Flammable cladding was blamed for the 2017 Grenfell Tower disaster and also has been linked to highrise fires in Australia.

He said if too many certifiers dropped out of the industry, local councils would have to become the certifier of last resort even though they did not have the resources to take on the role.

Mr Easton said the State Government might now have to step in to provide affordable premiums for certifiers to stop the industry coming to a standstill.

Queensland Building and Construction Commission commissioner Brett Bassett conceded certifiers were facing premium increases.

“The QBCC is aware of one of two certifiers who are unfortunately currently experiencing circumstances arising from litigation and claim matters,” said Mr Bassett.