Compare Life Insurance :: News
SHARE

Share this news item!

Gallagher Warns Builders of Legal Changes Affecting Professional Indemnity Insurance in NSW

Gallagher Warns Builders of Legal Changes Affecting Professional Indemnity Insurance in NSW

Insurance broker Gallagher has issued a cautionary note to builders in New South Wales (NSW) regarding significant legal changes that are reshaping professional indemnity (PI) insurance requirements.
These developments stem from the state's Design and Building Practitioners Act 2020 (DBP Act) and a pivotal High Court ruling in the Pafburn strata defects case.

The DBP Act introduces a statutory duty of care that is non-delegable, retrospective, and applies across all building types and participants, including individual employees and directors. This duty covers construction work performed up to 10 years before the act commenced, meaning work undertaken from mid-2010 may be subject to its provisions if damage is discovered after 2020. Consequently, directors, officers, and practitioners who have since retired, sold their interest, or moved to other roles could still be held liable.

Unlike other elements of the DBP framework, such as compliance declarations tied to specific building classes, the duty of care is universal in scope. It applies across all building classes and encompasses the full range of construction activities, including design, supervision, project management, and the supply or manufacture of building products.

The Pafburn case further solidifies this framework by confirming that breaches of the DBP statutory duty of care result in non-delegable, vicarious-style liability. This means developers and head contractors can no longer rely on NSW's proportionate liability regime to limit their exposure on DBP Act claims by pointing to the conduct of subcontractors.

In light of these legal changes, Gallagher advises developers, head contractors, and other project participants to reassess their risk frameworks and insurance arrangements. Key considerations include:

  • Tightening the agreed scope of works.
  • Reevaluating contract terms with subcontractors.
  • Considering requirements for minimum PI limits.
  • Expressly contracting out of proportionate liability where appropriate.

Additionally, a closer examination of PI programs is recommended, focusing on:

  • Limits, deductibles, and retroactive dates.
  • The breadth of "professional services" definitions.
  • Whether DBP Act exposures are clearly contemplated.
  • How employees, directors, and related entities are treated under the policy.

For builders and construction professionals in NSW, staying informed about these legal developments and proactively adjusting insurance and risk management strategies is crucial to ensure compliance and protect against potential liabilities.

Published:Friday, 16th Jan 2026
Source: Paige Estritori

Share this news item:

Insurance News

Markel Introduces Tailored Professional Indemnity Insurance for Australian Businesses Markel Introduces Tailored Professional Indemnity Insurance for Australian Businesses
16 Jan 2026: Paige Estritori

In a significant development for the Australian insurance market, Markel, a US-based specialty insurer, has launched professional indemnity (PI) insurance products tailored specifically for Australian businesses. This strategic move comes in response to a notable reduction in PI insurance capacity over recent years, leaving many professionals seeking reliable coverage options. - read more
APRA Data Highlights Rising Costs in Public Liability and Professional Indemnity Insurance APRA Data Highlights Rising Costs in Public Liability and Professional Indemnity Insurance
16 Jan 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has released its latest National Claims and Policies Database (NCPD) statistics, shedding light on the escalating costs associated with public liability and professional indemnity (PI) insurance in Australia. The data indicates a substantial rise in premiums and claims expenses, posing financial challenges for businesses across various sectors. - read more
Gallagher Warns Builders of Legal Changes Affecting Professional Indemnity Insurance in NSW Gallagher Warns Builders of Legal Changes Affecting Professional Indemnity Insurance in NSW
16 Jan 2026: Paige Estritori

Insurance broker Gallagher has issued a cautionary note to builders in New South Wales (NSW) regarding significant legal changes that are reshaping professional indemnity (PI) insurance requirements. These developments stem from the state's Design and Building Practitioners Act 2020 (DBP Act) and a pivotal High Court ruling in the Pafburn strata defects case. - read more
Queensland Strata Owners Urged to Act on Cyclone Mitigation Measures for Insurance Savings Queensland Strata Owners Urged to Act on Cyclone Mitigation Measures for Insurance Savings
16 Jan 2026: Paige Estritori

Strata property owners in North and Central Queensland are being encouraged to take advantage of new federal and state initiatives designed to reduce insurance premiums through approved cyclone mitigation activities. Following regulatory updates to the Cyclone Reinsurance Pool effective April 1, strata buildings in eligible regions can now receive insurance premium reductions when undertaking structural reinforcements such as storm-resistant windows, upgraded roofing, and compliant external doors. - read more


Life Insurance Articles

Navigating Pre-existing Conditions in Income Protection Insurance Navigating Pre-existing Conditions in Income Protection Insurance
Income protection insurance is a safeguard that provides individuals with financial stability in the event they are unable to work due to illness or injury. This type of insurance typically replaces a significant percentage of the insured's income, ensuring that their financial commitments can still be met during periods when they cannot earn an income through employment. - read more
The Role of Life Insurance in Your Overall Financial Strategy The Role of Life Insurance in Your Overall Financial Strategy
Financial planning plays a pivotal role in managing your economic resources effectively. By assessing your income, expenses, and goals, you can create a plan that helps achieve financial security. A comprehensive financial plan covers saving, investing, budgeting, and managing liabilities to secure your future. - read more
Breaking Down Common Income Protection Insurance Terms Breaking Down Common Income Protection Insurance Terms
Income protection insurance is designed to provide financial support if you're unable to work due to illness or injury. It aims to replace a portion of your income during such times, ensuring you can maintain your lifestyle and meet financial obligations. - read more
How Life Insurance Provides Financial Security for Your Loved Ones How Life Insurance Provides Financial Security for Your Loved Ones
Life insurance is a crucial part of any comprehensive financial plan, providing peace of mind that your loved ones will be financially secure in the event of your passing. - read more


Start Here !
life insurance
Apply now for your free Insurance assessment and price comparisons!

Start Here

Life Cover Amount:
Postcode:


All quotes are provided free and without obligation. We respect your privacy.
Knowledgebase
Insurable Interest:
A financial or other kind of interest in the insured item or person, necessary for a valid insurance contract.