Five of Australia’s built environment peak industry bodies have urged the federal government to take a leadership role in addressing the crisis that has arisen from the use of combustible cladding.

In a joint letter, Master Builders Australia, the Property Council of Australia, the Insurance Council of Australia, Ai Group and the Australian Construction Industry Forum expressed concerns that difficulty in securing insurance is undermining the health of the building and construction industry.

“Building surveyors, engineers and architects are now struggling to obtain the insurance they need to do their job, which in turn could seriously affect future building or construction activity,” the letter states.

“Australian and international insurers are introducing strict cladding-related exclusions in mandatory professional indemnity insurance products for building practitioners in the building supply chain. The discovery of major defects in buildings has significantly reduced the ability of those building owners to find an insurer willing to accept the risk,” the letter continues.

To maintain confidence in the industry, the group believes the federal government must take a leadership role in working with state and territory governments to ensure a consistent, industry wide approach to deal with the problems arising from the widespread use of combustible cladding.

“State and territory governments have not taken a consistent and comprehensive approach to undertaking and completing audits of existing high-rise buildings with combustible cladding, nor developed a remediation strategy,” the letter states.

“Governments are taking an inconsistent and fragmented approach to implementing reforms described in the Shergold-Weir report, which was released 18 months ago.”

The group states that while some action has been taken to amend the National Construction Code (NCC) to eliminate the use of many types of combustible cladding on new building facades, the response of state and territory governments to dealing with cladding on existing buildings has been patchy and inconsistent.

“Positive action has been taken in some jurisdictions; however, other states are lagging and the continued inconsistency in the approach across governments is manifesting in the crisis confronting building practitioners in the building supply chain. This has led to significant increases in professional indemnity premiums and a reduction in cover via exclusions on combustible cladding and non-conforming building products,” the letter states.

“Consumers, building owners, building practitioners and their insurers need certainty and confidence in building regulation. Building and construction, when combined with the property sector, is the nation’s largest industry, provides the most full-time jobs and is a vital engine of economic growth. The economy must not be put at risk by the failure to provide certainty through a consistent approach in dealing with these issues.”

To address the problems the group believes the federal government needs develop and implement a consistent and best practice Australia-wide response for risk assessment and a rectification strategy for existing buildings with combustible cladding with an agreed timetable that reflects the urgency of the issue.

“This will reduce confusion, clarify the scale of the challenge and support a viable professional indemnity insurance market that provides the coverage needed by industry participants and building owners.”

The group also recommends the creation of a joint government-industry taskforce to oversee urgent and consistent implementation of all Shergold-Weir report recommendations across all jurisdictions.

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