Professional Indemnity (PI) Insurance safeguards licensed builders against legal liability arising from actual or alleged breaches related to design. Even if you are not directly responsible for a defect, you can still face legal action when issues occur in a building project. PI Insurance is essential because it provides financial protection for claims linked to design liability.
Starting 1 July 2026, under the Design and Building Practitioners Act 2020/2021 in New South Wales, all registered building practitioners (including builders, designers, engineers, and certifiers) must hold “adequate” Professional Indemnity insurance for work they carry out.
This is decided in good faith based on liability exposure, with cover typically ranging from AUD 250,000 to AUD 10 million. [prosperlaw.com.au]
The Act applies up to 10 years after the work is completed, making run-off protection essential. [prosperlaw.com.au]
This new requirement reflects a broader shift toward strengthening accountability and consumer protection, ensuring all professionals can respond financially to negligence or defects. [nsw.gov.au]
A warehouse roof collapsed during a storm. The builder, under a design-and-construct contract, subcontracted the roof design to a structural engineer. The owner claimed $10 million in damages. The PI insurer defended the builder and covered $250,000 in defence costs. If the engineer had ceased operations, the builder’s PI policy would indemnify the full $10 million liability.
A homeowner sued a builder for $1 million after cracks appeared in a stone tile floor. The issue was traced to a design fault specified by the architect. The builder’s construction policy excluded design defects, leaving him to pay $70,000 in defence costs. PI Insurance would have covered these costs.
Your CIG Insurance broker can advise you on coverage including the following coverage benefits:
CIG is part of the Steadfast Network, which means clients get access to broader policy wordings and products you won’t find on retail comparison sites. More importantly, we back clients not just at policy setup but through claims, renewals, and those moments where you need to focus on growing your business. Whether you require a detailed assessment of your current cover or clear, informed guidance on your insurance needs, our team is ready to support you.
We prefer building a relationship with you to deepen our understanding of your business and its objectives. With over 20 years of protecting Australian businesses, we recognise the value of building trust with our clients, so you can expect transparency and collaboration when you choose CIG Insurance.
If you’re ready to receive personalised advice, contact us today or submit an enquiry to get started.
