The insurance landscape is changing for Australian builders. New Professional Indemnity requirements are on the horizon for registered building practitioners in NSW and are already in place in other states and territories.
However, even if cover is not yet mandated in your area, you may want to consider how Professional Indemnity may fit into your business as a way to help protect your livelihood.
What is Professional Indemnity insurance?
Professional Indemnity insurance covers losses claimed by a third party and defence costs due to alleged or actual negligence in your professional services or advice. For building practitioners, this may include key risks and work activities, such as delay costs, failing to obtain necessary approvals or permits, failing to complete work on time, and loss of documents in their care.
Events like these and others could quickly become expensive headaches for builders. Without Professional Indemnity insurance, you could be left out of pocket for compensation and legal fees that erase profits and devastate your business financially.
Why Professional Indemnity is becoming more important
Professional Indemnity is fast becoming an important consideration for Australian building practitioners. It may be essential to meet legal and contractual obligations and to navigate increasingly complex construction projects
1. It may be mandatory
From 1 July 2027, registered building practitioners in NSW must “hold adequate professional indemnity insurance” under the Design and Building Practitioners Act 2020.
This will put the state in line with other states and territories that already require Professional Indemnity for different classes of building practitioners and contractors. With more jurisdictions making this cover mandatory, Professional Indemnity is becoming increasingly non-negotiable for some building practitioners.
2. Projects are getting more complex
Construction projects are becoming more complicated and more detailed. They often involve multiple designers and contractors, providing ample opportunities for mistakes and miscommunication.
Bigger, more complex projects often have higher stakes. Common events, such as documentation errors and project delays, can result in financial losses for clients and lawsuits for the building practitioner. Professional Indemnity insurance can provide important cover to help protect a builder’s finances and business in these circumstances.
3. Your clients may expect it
Between government requirements and growing project complexity, Professional Indemnity may become necessary to meet client expectations.
Even if it is not legally mandated in your area, work contracts may include minimum Professional Indemnity limits for building practitioners. Clients may view this as a necessary step to manage their own risk and ensure that the building practitioners they work with take their commitments and responsibilities seriously.
Get covered in minutes
While NSW building practitioners have until end of financial year to get covered, you might want to consider getting covered now. Having a Professional Indemnity policy can build trust with potential clients. It demonstrates that you’re on top of industry requirements and dedicated to protecting your clients and your business.
BizCover makes it easy for registered building practitioners to get covered online in minutes. You can even quote Professional Indemnity alongside other types of insurance, such as Public Liability and tool cover, to see if you can save.
For on the go cover, go BizCover or call 1300 805 821 today.
*Information current as of 17 June 2026. General in nature and subject to change. See policy wording for details or contact BizCover.
This information is general advice only and does not take into account your objectives, financial situation or needs. It should not be relied upon as personal advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording or Product Disclosure Statement (available on our website). Please consider whether the advice is suitable for you before proceeding with any purchase. Target Market Determination document is also available (as applicable).
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