Mandatory Professional Indemnity insurance for NSW builders effective 1 July 2026
Building practitioners who don’t have Professional Indemnity insurance could be caught out by new laws coming into effect soon.
From the 1st of July 2026, under the Design and Building Practitioners Act 2021, it will be a mandatory requirement for all registered building practitioners in NSW to hold an adequate level of Professional Indemnity insurance.
Currently, the legislation does not state a mandated minimum amount of cover. Instead, building practitioners must take out a Professional Indemnity policy that, in their reasonable opinion, provides an adequate level of cover for liabilities that could be incurred during their work.
“This isn’t just about ticking a compliance box,” said Dan Quinn, Head of Customer Acquisition at BizCover, Australia’s number one online small business insurance service. “It’s about protecting your business’s future, profitability and reputation, as well as your clients.”
One of the most important things to note about the Design and Building Practitioners Act 2021 is that it imposes a statutory ‘duty of care’ on professionals involved in construction work. This is to avoid causing financial loss to current and future landowners due to defects. However, this duty of care applies retrospectively and claims can be brought up to ten years after the work is completed.
“Professional Indemnity cover can help to provide protection against risks related to professional services and advice,” said Quinn. “It’s always important to regularly review your insurance to make sure it’s still fit for purpose. But there is an added impetus for NSW building practitioners to review theirs before the 1st of July deadline.”
From 1st July 2025, BizCover will be offering quotes on products from DUAL and Chubb that provide Professional Indemnity insurance designed for registered building practitioners.
The minimum cover for Professional Indemnity for registered building practitioners starts at $250,000 with a maximum of $10 million, and covers businesses with an annual revenue of up to $10 million. Having multiple options available means that people have a choice when comparing insurance, so they can find the cover that works for them.
“BizCover understands the needs of small business owners, especially tradies,” said Quinn. “That’s why we’ve made it easy to compare quotes, purchase policies and get your documentation online in minutes, no matter where you’re working that day.
“Jump on your phone or computer whenever you can squeeze in time to start comparing quotes. Call our team and speak to one of our consultants if you need a hand. Just make sure you think about your Professional Indemnity insurance before the 1st of July.”
For more information about insurance for building practitioners, follow the link.
Notice of amendment:
At the time of publishing this article (24 June 2025), these changes were due to take effect on 1 July 2025. On 25 June 2025, the NSW Government announced a further 12-month extension, making the final cut-off date 1 July 2026. We have made the consequent updates to this article to avoid any confusion. This last-minute change by the NSW Government recognises the challenges builders face in obtaining Professional Indemnity insurance.
If you’re looking for insurance for builders, you can get fast and easy quotes with BizCover online.
