The NSW Design and Building Practitioners framework introduced new professional indemnity insurance requirements for parts of the construction industry. The legislation aims to improve accountability and consumer protection across building projects.
The requirements apply to specific registered practitioners carrying out regulated work under the Design and Building Practitioners Act 2020 and its associated Regulation.
At the time of writing, the NSW Government has extended the temporary exemption for registered building practitioners until 30 June 2027. Unless further legislative amendments occur, the mandatory professional indemnity insurance requirement for those practitioners is expected to commence on 1 July 2027.
Understanding how these changes apply to your business can help you review your current insurance arrangements before the requirements take effect.
Who The Changes Apply To
The Design and Building Practitioners framework applies to several registered practitioner classes involved in design and construction work.
You should pay attention to these requirements if you:
- Are involved in Class 2 or multi-unit residential projects in NSW
- Provide design and construct services
- Make changes to project plans or specifications
- Oversee consultants or engineers
- Have any involvement in design decisions, even if it’s not part of your formal role
Depending on the registration class, professional indemnity insurance requirements may already apply. Registered building practitioners currently operate under a temporary exemption that remains in place until 30 June 2027.
The legislation continues to evolve. Reviewing your obligations before renewing your policy can help identify any changes that may affect your business.
Why Professional Indemnity Insurance Matters
Professional indemnity insurance responds to claims arising from professional services, advice, design work, specifications, certifications, and similar activities. This differs from public liability insurance, which responds to claims involving personal injury or property damage caused to third parties. Many construction businesses carry both forms of insurance because each policy protects against different types of risk.
Businesses that provide regulated professional services should review whether their current professional indemnity policy aligns with the work they perform.
What Adequate Cover Means
The legislation does not prescribe a single minimum level of professional indemnity insurance for all practitioners. Instead, adequate cover depends on factors including the nature of the professional services provided, project size, contractual obligations, business structure, claims exposure, policy terms, and any applicable exclusions.
An insurance review can help determine whether your current policy reflects your professional activities and contractual requirements.
What To Review Before Your Next Renewal
Insurance requirements can change as legislation develops and business activities expand.
Before renewing your policy, consider reviewing
- the professional services your business provides
- practitioner registrations held within the business
- current policy limits
- exclusions that may affect future claims
- contractual insurance requirements
- project values and client expectations
A review may identify opportunities to adjust your cover before work begins on future projects.
How CGIB Can Help
Professional indemnity insurance should reflect the work your business performs and the risks associated with that work.
CGIB works with businesses across the construction sector to review existing insurance arrangements, compare available policies, and explain how different policy structures may respond to professional exposures.
Where appropriate, we can also discuss insurance options alongside Professional Indemnity Insurance, Professional Indemnity Insurance for the Construction Industry, Professional Indemnity Insurance for Building Designers, Public Liability Insurance for Builders and Contract works cover as part of a broader insurance review.
Request A Professional Indemnity Insurance Review
If your business performs regulated work under the NSW Design and Building Practitioners framework, reviewing your professional indemnity insurance before your next renewal can help you understand how the legislation may affect your current cover.
Speak with CGIB to discuss your existing policy or request a professional indemnity insurance review.
Frequently Asked Questions
No.
The requirements apply to specific practitioner classes registered under the Design and Building Practitioners framework. Your obligations depend on the work your business performs and your registration status.
At the time of writing, the temporary exemption remains in place until 30 June 2027.
Unless the NSW Government introduces further amendments, the requirement is expected to apply from 1 July 2027.
No.
Public liability insurance and professional indemnity insurance respond to different types of claims. Holding one policy does not replace the other.
Adequacy depends on several factors, including the services you provide, project values, contractual obligations, policy terms, and your business activities.
A broker can review your existing policy and discuss whether it aligns with your current operations.
Many businesses choose to review their insurance arrangements before renewal rather than waiting until legislative requirements change. Early planning provides time to assess policy options and address any gaps.
