D&C policies and the DBP Act – closing the gap before July
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With mandatory PI insurance and expanded building classes both arriving on 1 July 2026, the construction insurance market faces a reckoning over policy language, practitioner readiness and affordability
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FIVE YEARS on from the introduction of the NSW Design and Building Practitioners Act 2020, the insurance products underpinning the sector it governs are still, by many accounts, playing catch-up.
For Ross Chambers, head of financial lines at Hutch Underwriting, the overriding story of those five years has been one of ambiguity. “The main impact has been confusion,” he says. “Brokers are reaching out to their underwriters to try and get a better understanding of who is able to provide cover as per the requirements of the act.”
That confusion reflects a mismatch between the language of the legislation and the language of policy wordings. “Whilst the primary insurance exposures for builders haven’t changed with the introduction of this act, there are areas of the act which are not addressed explicitly in most D&C [design and construct] policies,” says Chambers. “Brokers and, by extension, clients, would feel a lot more certain about their purchasing decisions if they had affirmative cover confirmation in their products.”
The DBP Act was introduced in response to high-profile structural failures at Sydney’s Opal Tower and Mascot Towers, which exposed systemic problems in the design and construction of multi-residential buildings. It requires practitioners involved in regulated work to be registered, to lodge designs and compliance declarations on the NSW Planning Portal, and to hold appropriate insurance.
From 1 July 2026, the regime will extend to cover repair,
Hutch Underwriting is an independent, employee-owned Australian underwriting agency building a complete set of intermediated insurance products backed by Lloyd’s and other insurers. Built for brokers, Hutch combines smart digital quoting – through Ebix Sunrise Exchange, the Steadfast Client Trading Platform and Unmand – with clear wordings, responsive underwriting and local in-house claims expertise. Hutch’s objective is to be the broker’s market of choice for digital insurance products.
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DBP Act: Key development milestones before 2026
Dec 2018
“A lot of clients who have never had to think about their PI exposures will need advice from their brokers as this new requirement becomes part of their insurance needs”
Ross Chambers,
Hutch Underwriting
alteration and renovation work on existing Class 3 and Class 9c buildings, including boarding houses, student accommodation, aged care facilities and parts of hotels and motels. New buildings in those classes have been captured since July 2023, but the July 2026 changes bring the far larger universe of existing buildings and remedial works into scope for the first time. On the same date, PI insurance becomes mandatory for every registered building practitioner in NSW.
A gap in the market The coverage architecture of most D&C policies is deliberately wide. The long list of professional services included in standard wordings means policies are designed to respond to a broad range of claims related to these services. But the DBP Act’s definition of who must hold suitable insurance has stretched the potential buyer pool beyond the clients the PI market has traditionally been comfortable insuring.
Chambers points to a structural gap at the heart of this challenge. “Historically, the PI market has shied away from providing insurance to tradespeople and other building practitioners with no specific engineering or design activities,” he says. “This gap in the market for tradespeople and those non-design building practitioners who have professional obligations to lodge compliance declarations and other documents to the NSW Planning Portal means that they don’t have many options available to them, and even less at an affordable premium.”
The industry hasn’t stood still. Chambers acknowledges the productive collaboration between associations and industry bodies to work through amendments and clarify intent. What hasn’t followed, he says, is any corresponding shift in how policies are actually written. “Over the five years the act has been established there hasn’t been a shift in D&C policies to using language that aligns with the act,” he says. “I think it’s time for insurers to start considering what language they can use to confirm their coverage stance, either positive or negative, and give policyholders some certainty.”
The July 2026 influx The mandatory PI requirement arriving on 1 July will bring a wave of first-time buyers into a market they may know very
little about. For brokers, that means there could be a surge in demand for basic education at the same time as more complex structural questions about policy adequacy are pressing in from another direction.
“A lot of clients who have never had to think about their PI exposures will need advice from their brokers as this new requirement becomes part of their insurance needs,” says Chambers. “Claims-made policies can be confusing if you are new to dealing with them. Once clients can be helped over this hurdle, they will need to understand the options available in the market.”
The ripple effects will not stop at placement. Chambers flags that the learning curve will extend well into the claims life cycle. “This will also bleed through to the claims process, cancelling policies and run-off cover requirements,” he says. “Education is going to be in high demand, including for brokers whose clients will be asking questions of them.”
In premium terms, the expansion is likely to be a positive for the market, but not a dramatic one. “Whilst policy count will increase, the overall premium pool for the market will likely see a small, albeit positive, impact,” says Chambers. Downward pressure from a softening market and the lower average premiums associated with smaller, newly registered practitioners will temper the benefit. “Competition for high-quality risks continues to be fierce,” he adds. “Relationships and ease of transaction may be the determining factor for writing the new additions.”
For brokers navigating that influx, Hutch’s Design and Construct PI product is built for exactly this moment. Designed for SME building and construction businesses working on residential and commercial projects up to $10 million in value, it includes professional indemnity and cyber coverage as standard, and sits within appetite for the construction businesses now facing mandatory PI obligations for the first time.
The product is available via Ebix Sunrise Exchange (code HUTPI) and SCTP and is also Dawn-enabled. Dawn is Hutch’s AI email ingestion service: email any proposal form to dawn@ai.hutchunderwriting.com.au and your quote arrives pre-populated in your Sunrise import queue within minutes. No keying is required at either end – what Hutch believes is a global first in genuinely keyless quote and bind via Sunrise.
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Published 12 Jun 2026
“If losses are unable to be recovered from responsible parties, the D&C insurance market may become unaffordable for all but the largest of building contractors”
Ross Chambers,
Hutch Underwriting
Opal Tower in Sydney Olympic Park is evacuated on Christmas Eve after residents report cracking sounds and structural concerns, exposing serious deficiencies in building oversight and accountability
Jun 2019
Mascot Towers in Sydney is evacuated after cracks are discovered in the primary support structure, reinforcing calls for urgent legislative reform
Jun 2020
The DBP Act commences in part on 11 June 2020, introducing a new statutory duty of care for building practitioners
Jul 2021
The DBP Act begins applying to remedial building work for Class 2 buildings
New insurance requirements take effect, requiring registered design practitioners, registered principal design practitioners, registered building practitioners and registered professional engineers to be “adequately insured”
Jul 2023
The act’s scope is extended to include Class 3 and 9c buildings for new construction, though remedial and renovation work on existing Class 3 and 9c buildings remains deferred
Jul 2024
The insurance exemption for registered building practitioners is extended, with builders remaining exempt from mandatory PI insurance requirements until 30 June 2025
2025
The PI insurance exemption and the remedial works obligation for Class 3 and 9c buildings are each deferred again, with the new commencement date pushed to 1 July 2026
Sources: Diagnostech, Gadens, Builders Institute
PI insurance becomes mandatory for all registered building practitioners in NSW, including registered building, design and principal design practitioners
Main changes to DBP Act coming on 1 July 2026
Sources: Hutch Underwriting, NSW Government, TradieVerify
The DBP Act expands to regulate repair, alteration and renovation work on existing Class 3 and 9c buildings, including boarding houses, hostels, student accommodation, parts of hotels and motels, and aged care facilities
Regulated designs and compliance declarations for remedial and renovation work on these newly covered building classes must be lodged through the NSW Planning Portal
Practitioners who don’t hold current PI cover will not be compliant and should not be appointed to regulated DBP work
The strata building bond rate increases from 2% to 3% for new strata buildings without home building compensation insurance
Stronger powers come into effect for NSW Fair Trading and Building Commission NSW to refuse applications, cancel licences and hold private certifiers accountable
Many remedial builders and consultants operating in these sectors will come under DBP-style requirements for the first time
Non-delegable duty and the portfolio question For those already established in the D&C space, the expansion of the act raises more unsettling questions about how claims will ultimately be apportioned and absorbed.
The DBP Act creates a non-delegable duty of care, meaning a practitioner cannot simply pass responsibility down the contractual chain. For underwriters reviewing portfolio performance, this has significant implications. “The non-delegable nature of the DBP Act may become significant when reviewing portfolio performance,” says Chambers. “Defence costs and vicarious liability are major components of the losses impacting a construction portfolio, and historically the contractual management maintained by a business has been important when assessing a risk, but it may become crucial for risk acceptance.”
The stakes become clearer if losses can’t be recovered from responsible parties lower in the chain. “If losses are unable to be recovered from responsible parties, the D&C insurance market may become unaffordable for all but the largest of building contractors,” Chambers says.
Hutch Underwriting is already factoring broader economic pressures into its risk assessment process. Construction costs remain elevated, insolvencies in the sector have been running at high rates and project delays create compounding exposures.
“We are using financial analysis to review each of our submissions to assess for financial viability and likelihood of failure of the business in the next 12 months,” says Chambers. “This impacts the premium charged on a risk-by-risk basis and allows us to accommodate the risks presented by economic factors within a portfolio.”
An overlooked exposure One segment of the market sits in a particularly exposed
position that has attracted relatively little attention: individual employees who may find themselves caught by the act’s obligations without the cover they assumed was in place.
Chambers identifies this as a genuine concern. “Individual staff who are potentially held responsible under the act but who may no longer be insured as their employer has let the policy lapse or has ceased trading,” he says, represent a real vulnerability in the current framework. His proposed solution is structurally novel: “I think this may need to be addressed via a union-based master policy, as a market for individuals doesn’t currently exist.”
The broker’s role in a shifting market
Across all these moving parts, the role of the broker is arguably more important than at any point since the DBP Act was first introduced. The combination of new mandatory requirements, unfamiliar policy structures, non-delegable duties and economic volatility creates a set of questions that clients can’t be expected to work through alone.
Chambers is direct about what’s required. “Brokers should be educating themselves on the areas of insurance their clients are new to, as well as building knowledge around the legislation that impacts them,” he says. “Feeling like you are speaking with an adviser who is prepared and knowledgeable about your concerns is all you can ask for when engaging professional services.”
The July 2026 changes will test whether the market can deliver that preparation at scale. The legislation has set the accountability framework. Whether the insurance products and the broking community are ready to speak its language remains the open question.
Disclaimer: From 1 July 2026, changes to the NSW DBP framework are currently scheduled to commence. Brokers should monitor NSW Building Commission announcements for any further updates.