How will Latent Defects Insurance Assist the Construction Sector?
Snapshot
- Crisis of Confidence in Construction: The Australian construction sector is facing a crisis due to high-profile defect cases and increasing insolvencies, which have eroded trust among property buyers and owners. Extensive defect lists in residential apartment buildings, including structural weaknesses and waterproofing failures, are compromising safety and long-term value.
- Government Initiatives: The NSW Government is actively working to introduce Latent Defects Insurance (LDI) as a mandatory requirement for residential apartment buildings. This initiative is part of the broader Construct NSW reform agenda, aiming to restore confidence by addressing systemic issues. The proposed LDI scheme would replace the current Strata Building Bond and Inspections Scheme (SBBIS) after a transitional period.
- Insurance Solution: LDI is a specialised insurance product designed to cover serious defects in critical building elements for up to ten years after the completion of a construction project. It offers protection against defects in the building’s structure, fire safety systems, and waterproofing, ensuring that successive owners are protected for the entire ten-year period.
The Australian construction sector is experiencing a crisis of confidence, with high-profile building defect cases and rising insolvencies eroding trust among property buyers and owners. This whitepaper explores how Latent Defects Insurance can play a pivotal role in restoring confidence and protecting property owners. It provides insights into the current government positions and the potential impact of mandating LDI.
Dive into the full whitepaper to gain a comprehensive understanding of Latent Defects Insurance and its offerings. Learn how it can benefit your projects and ensure compliance with upcoming regulations.
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For more information or to speak to a specialist, please contact Mary-Catherine Hamill, Head of Construction, Australia at mary-catherine.hamill@aon.com, or Milos Obradovic, Placement Director for Construction, Australia, at milos.obradovic@aon.com.
