Insurance changes are coming for New South Wales builders in 2027.
Professional Indemnity insurance became mandatory for registered building practitioners under the Design and Building Practitioners Act 2020. However, the deadline for getting covered was pushed back for the third time in June. Building practitioners now have until 30 June 2027 to meet this requirement for registration.
While this year-long extension gives builders more time to get covered, you may want to consider getting Professional Indemnity insurance now anyway.
What is Professional Indemnity insurance?
Professional Indemnity insurance protects against losses claimed by a third party due to alleged or actual negligence in your professional services or advice. Subject to applicable limits, a policy covers compensation payable to a third party together with your defence costs (which can include legal costs, investigator costs, and expert fees).
This is different than Public Liability insurance, which is commonly required to receive certain trades licences, enter job sites, or work as a contractor. Once the new requirements come into effect, you’ll need a Professional Indemnity policy even if you already have Public Liability insurance.
What Professional Indemnity covers (and what it doesn’t)
For building practitioners, Professional Indemnity insurance covers key risks and work activities. These may include*:
- Financial losses caused by professional services (i.e., delay costs, property value decreases caused by certain non-rectifiable defects, or increased operating costs for buildings
- Breach of duty claims arising from common actions (i.e., failing to obtain necessary approvals or permits, failing to complete work on time, or not exercising reasonable care and skill when providing services)
- Loss of or damage to documents in your care, custody, or control
- Legal representation and defence costs (including investigation costs and legal fees)
Like insurance policy, Professional Indemnity for building practitioners also has events and activities that are not covered, such as*:
- Any provision of design or engineering services, or responsibility for them
- Costs to rectify, repair, replace, complete, or remediate any building work or element
- Costs to rectify, repair, or remediate defective building work
- Property development
- Breach of warranty arising from property development
- Building certification or verification of design compliance
Why builders may want to get covered now
With another twelve months to get covered, many building practitioners may decide to put off buying a Professional Indemnity policy until the next end of financial year. However, getting covered now could be beneficial for your business.
Complex building projects and razor-thin margins can cause costly delays. A Professional Indemnity policy helps registered building practitioners protect their finances and reduce out-of-pocket expenses should a build not go to plan.
Professional Indemnity insurance can also build trust. Potential clients may prefer to work with a builder who is covered; some may already require it in their project contracts. Having a policy demonstrates your commitment to protecting your business and your clients, and it shows that you are aware of the coming insurance requirement.
Get Professional Indemnity for builders today!
Professional Indemnity is more than just a future legal requirement for NSW building practitioners. It’s also an important way of protecting their businesses and finances if a project goes wrong.
With BizCover, registered building practitioners can quickly get a quote, buy online, and get instant cover in minutes. That’s easy peace of mind knowing you’re protected and well prepared for next year’s deadline.
For on the go cover, go BizCover.com.au 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 only and does not take into account your objectives, financial situation or needs. It should not be relied upon as 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).© 2026 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769
