Household Insurance Online :: News
SHARE

Share this news item!

NSW Court Decision Escalates Liability Risks for Construction Industry

Developers and Builders Face Increased Exposure Following Landmark Ruling

NSW Court Decision Escalates Liability Risks for Construction Industry?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

A recent landmark ruling in New South Wales has significantly altered the liability landscape for the construction industry.
The court's decision removes the ability for developers and builders to rely on proportionate liability defences under the Design and Building Practitioners Act 2020 (DBP Act), thereby increasing their exposure to claims related to building defects.

The DBP Act, which came into effect on 1 July 2025, introduced a statutory duty of care that is non-delegable, retrospective, and applies to all buildings and participants involved in their construction, including individual employees and directors. This means that developers and builders are now fully responsible for any defects, regardless of whether subcontractors or other parties were involved.

The significance of this ruling lies in its clarification that breaches of the DBP Act's statutory duty create a vicarious-like liability. Consequently, builders and developers are accountable for the entire cost of rectifying defects, even if they were caused by subcontractors. This places the onus on them to pursue separate claims against subcontractors to recover costs.

Given these changes, it is advisable for construction companies and professionals to reassess their professional indemnity (PI) insurance to ensure it adequately covers the increased risks. Additionally, the industry must be prepared to strategically manage complex multi-party litigation, including cross-claims, to allocate remediation costs appropriately among responsible parties.

For small business owners, tradies, sole traders, event organisers, and contractors operating in the construction sector, this development underscores the importance of understanding the evolving legal landscape and ensuring that their insurance coverage is comprehensive and up-to-date. Engaging with insurance brokers or legal advisors can provide valuable insights into managing these heightened risks effectively.

Published:Friday, 20th Mar 2026
Author: Paige Estritori
Sources

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Allianz Partners Highlights Risks of Travelling Uninsured
Allianz Partners Highlights Risks of Travelling Uninsured
20 Mar 2026: Paige Estritori
Recent research conducted by the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade (DFAT) has unveiled a concerning trend: approximately 14% of Australian travellers embark on international journeys without any form of travel insurance. This statistic has prompted Allianz Partners to urge Australians to reconsider the importance of securing adequate coverage before travelling abroad. - read more
Rising Medical Costs Lead to Surge in High-Value Travel Insurance Claims
Rising Medical Costs Lead to Surge in High-Value Travel Insurance Claims
20 Mar 2026: Paige Estritori
Southern Cross Travel Insurance (SCTI) has reported a notable rise in high-cost travel insurance claims, underscoring the escalating medical expenses faced by Australian travellers abroad. The insurer's most expensive claim last year amounted to $672,630, a 259% increase compared to the previous year's highest claim. - read more
Australian Travel Insurers Extend Support During Middle East Conflict
Australian Travel Insurers Extend Support During Middle East Conflict
20 Mar 2026: Paige Estritori
In response to the ongoing conflict in the Middle East, Australian travel insurers have mobilised additional resources to support customers impacted by the situation. The Insurance Council of Australia (ICA) announced that insurers are providing dedicated 24/7 assistance, coordinating medical care, and prioritising support for those in affected regions. - read more
Key Challenges for Australian Insurers in 2026: Premiums, Cybersecurity, and Talent
Key Challenges for Australian Insurers in 2026: Premiums, Cybersecurity, and Talent
20 Mar 2026: Paige Estritori
As the Australian insurance industry progresses through 2026, it faces a trio of significant challenges: escalating premium costs, increasing cyber threats, and a tightening labour market. These issues are reshaping the sector's priorities and strategies. - read more
Significant Decline in Australian Commercial Insurance Rates in Late 2025
Significant Decline in Australian Commercial Insurance Rates in Late 2025
20 Mar 2026: Paige Estritori
In the final quarter of 2025, Australia's commercial insurance sector experienced a notable 12% reduction in rates, marking the most substantial decrease among eight regions monitored by Marsh Risk's Global Insurance Market Index. This trend reflects a broader global pattern of declining insurance rates, with the composite index falling for the sixth consecutive quarter. - read more


Household Insurance Articles

Essential Tips to Find the Right Home and Contents Insurance for Your Family
Essential Tips to Find the Right Home and Contents Insurance for Your Family
In the face of unpredictable climate patterns and wild weather, safeguarding your home becomes a top priority, especially in a country like Australia. Choosing the right home and contents insurance is essential in providing a financial safety net against the forces of nature. With this in mind, the importance of insurance cannot be overstated, acting as a crucial buffer to protect your property and belongings. - read more
Why Income Protection Insurance Matters for Every Australian Earner
Why Income Protection Insurance Matters for Every Australian Earner
The unpredictable nature of life can often leave us vulnerable to financial uncertainty, especially when it comes to our ability to earn an income. Whether due to illness, injury, or unexpected job loss, the loss of income can have a devastating impact on our financial stability and quality of life. This is where the importance of insurance in financial planning becomes evident. - read more
Why Australian Households Can't Afford to Skip Insurance
Why Australian Households Can't Afford to Skip Insurance
Household insurance is a critical safety net for many Australian families. It protects against unexpected events such as natural disasters, theft, and accidents, ensuring that your home and belongings can be repaired or replaced if something goes awry. - read more
How Much Should You Budget for Insurance in Australia?
How Much Should You Budget for Insurance in Australia?
Welcome to the comprehensive guide on navigating the diverse world of insurance in Australia. Whether you're safeguarding your personal assets or protecting your business interests, insurance plays a pivotal role in financial security. In this introductory section, we'll explore why budgeting for insurance is crucial for Australians, delve into the various types of insurance available, and illustrate how insurance should integrate into your broader financial planning strategy. - read more
Building Your Safety Net: Understanding Total Replacement Cover
Building Your Safety Net: Understanding Total Replacement Cover
For many Australians, their home is their castle, their sanctuary, and most significantly, their largest investment. Safeguarding this asset against unpredictable events is not merely a consideration—it's a necessity. That's where Total Replacement Cover comes into play. But what does this term really mean, and why is it paramount when it comes to choosing a home insurance policy? - read more


Your free Household insurance quote comparison starts here!
First Name:
Postcode:

All quotes are provided free and without obligation by a Specialist from our National Broker referral panel. See our Privacy Statement for more details.


Knowledgebase
Claim:
A formal request made by the policyholder to the insurance company for payment of a loss covered by the insurance policy.