Life Insurance Online :: News
SHARE

Share this news item!

NSW Court Decision Escalates Liability Risks for Construction Industry

Developers and Builders Face Full Responsibility for Building Defects

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 aimed at protecting property buyers. This duty is non-delegable, retrospective, and applies to all participants in the construction process, including individual employees and directors. The recent court ruling has clarified that breaches of this statutory duty result in full liability for developers and builders, regardless of whether subcontractors or other parties contributed to the defects.

Previously, developers and builders could apportion blame to subcontractors, thereby limiting their own liability. However, the court's decision establishes that they are now fully responsible for the entire cost of rectifying defects. This shift places the onus on developers and builders to pursue subcontractors through separate legal actions if they seek to recover costs.

For the construction industry, this ruling underscores the importance of comprehensive risk management strategies and robust professional indemnity insurance coverage. Companies must reassess their insurance policies to ensure they are adequately protected against the increased liability risks. Additionally, the ruling highlights the need for meticulous oversight of all aspects of construction projects, as any defects can lead to significant financial and reputational consequences.

In light of these developments, construction professionals are advised to:

  • Review and update their professional indemnity insurance policies to ensure sufficient coverage.
  • Implement stringent quality control measures throughout the construction process.
  • Maintain thorough documentation of all project stages to support potential legal defences.
  • Engage in proactive communication with subcontractors to ensure adherence to quality standards.

By taking these steps, construction companies can better navigate the evolving legal landscape and mitigate the heightened risks associated with building defects.

Published:Monday, 16th Feb 2026
Source: Paige Estritori

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

Share this news item:

Insurance News

Survey Highlights Alarming Number of Australians Travelling Uninsured
Survey Highlights Alarming Number of Australians Travelling Uninsured
16 Feb 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 travelers embark on international journeys without any form of travel insurance. This statistic has prompted industry leaders to urge Australians to reconsider the importance of securing adequate coverage before traveling abroad. - read more
IAG's Impressive FY25 Performance and Strategic Outlook for FY26
IAG's Impressive FY25 Performance and Strategic Outlook for FY26
16 Feb 2026: Paige Estritori
Insurance Australia Group (IAG) has reported a notable 4.3% increase in gross written premium (GWP), reaching $17.1 billion for the fiscal year 2025. This growth is accompanied by a net profit after tax of $1.36 billion, marking a significant rise from the previous year's $898 million. The company's reported insurance profit stands at $1.74 billion, with a margin of 17.5%, and a return on equity improving to 19.4%. Shareholders are set to benefit from a full-year dividend of 31. - read more
Potential Decrease in Australian Insurance Premiums Amid Global Market Downturn
Potential Decrease in Australian Insurance Premiums Amid Global Market Downturn
16 Feb 2026: Paige Estritori
Recent developments in the global financial markets have sparked discussions about potential benefits for Australian insurance policyholders. A significant sell-off in the insurance sector on Wall Street has led analysts to speculate that Australian insurance premiums could see a reduction in the near future. - read more
NSW Court Decision Escalates Liability Risks for Construction Industry
NSW Court Decision Escalates Liability Risks for Construction Industry
16 Feb 2026: Paige Estritori
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. - read more
Rising Public Liability Insurance Premiums Challenge Australian Businesses
Rising Public Liability Insurance Premiums Challenge Australian Businesses
16 Feb 2026: Paige Estritori
The Australian Prudential Regulation Authority (APRA) has released its latest National Claims and Policies Database (NCPD) statistics, revealing a substantial increase in public liability insurance premiums over recent years. According to the data, premiums have risen by 40% since 2015, a rate that surpasses general inflation and places additional financial strain on businesses across the country. - read more


Life Insurance Articles

The Impact of Hobbies and High-Risk Activities on Life Insurance Costs
The Impact of Hobbies and High-Risk Activities on Life Insurance Costs
Life insurance is an essential financial protection that provides peace of mind to policyholders and their loved ones. The premiums you pay are determined by various factors, including age, health, lifestyle, and occupation. - read more
Protecting Your Loved Ones: The Role of Life Insurance in Estate Planning
Protecting Your Loved Ones: The Role of Life Insurance in Estate Planning
Estate planning is a process that involves the management and distribution of an individual's assets and responsibilities in the event of their passing or incapacitation. It is an essential part of financial planning that ensures your assets are managed according to your desires and your loved ones are taken care of. - read more
Life Insurance Essentials: Protecting Your Growing Aussie Family
Life Insurance Essentials: Protecting Your Growing Aussie Family
Life insurance remains one of the most crucial considerations for new parents aspiring to provide a secure future for their growing families. The arrival of a child marks a transformative moment, redefining priorities and responsibilities. At its core, life insurance is a safety net, designed to offer financial protection and stability to loved ones in the event of an unforeseen tragedy. - read more
Understanding Various Life Insurance Types: Which One is Right for You?
Understanding Various Life Insurance Types: Which One is Right for You?
Financial security is one of the most important aspects of modern family life. Ensuring that loved ones are protected and well-supported in the event of an untimely death is a fundamental concern for many Australians. - read more
Life Insurance for Young Adults: Why It’s Never Too Early to Get Covered
Life Insurance for Young Adults: Why It’s Never Too Early to Get Covered
Life insurance might not be at the forefront of your mind, especially when you're young and healthy. However, understanding the essence of life insurance early on can significantly impact your financial future and provide much-needed peace of mind. - read more


Your Life Insurance Quote Starts Here

Life Cover Amount:
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
Waiting Period:
The time period that must pass after filing a claim before the insurance coverage becomes effective or benefits are paid.