In August 2021, Holman Webb Lawyers reported that the New South Wales Government was considering introducing ‘Decennial Liability’ insurance (inherent defect insurance) to provide up to 10 years of cover to apartment owners for the cost of rectifying defects that threaten the structural integrity of the building.
At the time of writing, Kevin Anderson, NSW’s Minister for Better Regulation and Innovation told the Financial Review that the proposal is for a “10-year product on that building, which basically says a building is of sound quality, high quality, will stand the test of time over a 10-year period, and if there are defects … they will be covered”.
In a 25 October media release, the minister for fair trading, Victor Dominello has now announced that the government has accepted the application of Resilience Insurance to offer the insurance.
The minister’s view is that “Decennial liability gives power to the purchasers and body corporates, who will no longer need to prove liability and will only have to demonstrate the damage for assessment.”
The policy will provide cover for up to 10 years and would cover critical parts of the building’s common property, including the building’s structure, fire safety systems and water proofing.
The Decennial liability cover, in conjunction with the cover under the Design and Building Practitioners Act 2020, now means that apartment owners have up to 10 years to either make a claim under the policy, or make a claim against the building practitioner for damage to the building caused by defective building works or design.
If you have any questions with regard to the above, or would like to discuss an insurance-related concern of your own, please don’t hesitate to get in touch with Holman Webb’s Insurance Group today.