The NSW Government has proposed a new ‘fitness for purpose’ design practice standard for professional engineers registered under the Design and Building Practitioners Act 2020 (NSW).
JMD Ross Insurance Brokers was active in discussions before and during a widely attended industry roundtable meeting about the practice standard on 24 August 2023.
We support any initiatives to improve the NSW construction industry and the professional indemnity (PI) insurance market in general. However, there is broad opposition to the proposed standard, despite it being restricted to fitness for purpose of a design and not the end product itself.
Some key points raised at the roundtable were:
- Many PI polices do not cover the proposed fitness for purpose of design obligation
- The obligation would contradict the current fitness for purpose exemption for architects and engineers under the Australian Consumer Law
- The PI market has seen notable premium increases and restricted availability of policies in recent years and the practice standard could fuel more of the same.
The initial roundtable meeting’s main purpose was to highlight issues of concern. Attendees included engineers, representatives from the NSW Government, the Insurance Council of Australia, the Professional Standards Council, Consult Australia, Engineers Australia and other industry professionals.
The NSW Government will arrange a follow up meeting soon to discuss solutions. We will keep you appraised of developments.