Professional Indemnity Insurance Update
Please see below a letter from Chris Bovill, Managing Director of Bovill Risk & Insurance Consultants Pty Ltd (BRIC) responding to recent media articles relating to the current state of Professional Indemnity Insurance for building surveyors and fire engineers.
Happy New Year to all!
We wish to address the issues raised in recent media articles regarding professional indemnity insurance for building surveyors and fire engineers.
In those articles there were several allegations and misstatements, which we believe were designed to scaremonger Building Surveyors, Fire Engineers and regulators.
As you will be aware Bovill Risk & Insurance Consultants Pty Ltd (BRIC) have been arranging professional indemnity insurance for building surveyors and fire engineers for more than 20 years. We believe this provides us with a significant insight into the status of the insurance market and the risk profile of the professions.
We wish to reassure all in the profession that BRIC continues to secure professional indemnity insurance without cladding exclusions and which comply fully with the requirements of the regulators in all states and territories as applicable, including Victoria and New South Wales.
To address the issues raised:-
The construction industry is not coming to a “screeching halt” as suggested in the article. The issue relating to cladding only affects certain high rise commercial buildings and has no or only minimal impact in other types of construction activity.
Those who are affected continue to secure compliant professional indemnity insurance and BRIC are confident of being able to continue to do so into the foreseeable future.
The premiums for building surveyors, fire engineers and other construction related professionals are all increasing. Some of this increase relates to the cladding issue, however in our opinion, the premium increases reflect a shift in the professional indemnity insurance market more broadly as insurers claims experience becomes more apparent and underwriters are more fully aware of the risk profile of your profession.
The principal market for this profession is in London through Lloyd’s who, as an insurance market regulator, are imposing increasing pressure on each of their members to adopt a more conservative approach to their risk pricing. Hence, we are seeing premium increases from London based insurers across numerous professions, not only building surveyors or fire engineers.
BRIC continue to have access to competitive insurers in London and to a lesser extent here in Australia.
In respect to the absence of Australian insurers, this statement is incorrect as BRIC continue to place professional indemnity insurance for building surveyors with some Australian insurers. The reality however is that very few Australian insurers have been actively involved in this segment of the market for over 10 years – well before this current cladding issue.
One correct statement made was that the professional indemnity insurance market in Australia remains relatively small, around $5M annually, compared with approximately $3M a couple of years ago. As you can see this relatively small pool of premium can be exhausted in a single claim. This is one reason why premiums are increasing – insurers now recognise the risk being carried by your profession and are beginning to price that risk accordingly.
Whilst existing clients of BRIC remain compliant, should you be experiencing difficulties in securing competitively priced and compliant professional indemnity insurance through your current broker, please give us a call to discuss and see if we can resolve your problem. Please contact us on 1800 077 933 or firstname.lastname@example.org.