Building Act Amendments – Building contractors insurance and director liability
Proposed changes to the Building Act 2004 will make significant changes to pre-contract disclosure by building contractors undertaking residential works. The licensing of builders under the Licensed Building Practitioners scheme will remain voluntary; however as from 1 March 2012 building practitioners will need to be licensed to carry out restricted building work. As from that date unlicensed building practitioners will have to engage a licensed building practitioner to either carry out or supervise restricted work. Prior to entering into a construction contract a prospective building contractor will be required to provide the consumer with information of the skills, qualifications and the license status of persons who will undertake the work.
All licensed building practitioners undertaking restricted building works will therefore need to revisit the basis of their professional indemnity insurance. In particular, licensed building practitioners who are principals of small-to-medium entities should assess their risk and the scope of any professional indemnity insurance where they are providing the building service, or supervising others undertaking restricted building works.