The latest upgrade to the cover provided under the Contract Works policy.

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1 Welcome New home construction continues to be a shining light in the Australian economy and this issue of BuildCover Quarterly looks at some of the interesting happenings across the building and insurance industry. In our Spring edition, we share information about: The latest upgrade to the cover provided under the Contract Works policy. How cuts to insurance red tape in NSW will boost the local building industry. What the latest and greatest developments in new technology mean for builders. Australia s new National Construction Code available free and online for the first time. How WA and SA builders have been fined for issuing fake or forged home warranty insurance certificates. We hope you enjoy this edition of BuildCover Quarterly and we look forward to bringing you more news and information next quarter. The BuildCover Team 1

2 Extra cover with EBM s Contract Works policy One of the important roles of EBM as an insurance broker is to ensure that the cover we can offer is continually reviewed and meets the changing needs of the industry. The latest upgrade available under the Contract Works policy is an additional endorsement for builders speculative projects. This should prove of great interest to our builder clients. In some states, on completion of a project, builders obtain an Occupancy Permit and cover under their Contract Works policy ceases to be in effect potentially leaving the builder exposed. It is not possible to obtain cover under any other product because the completed house is vacant and insurers do not wish to take on the risk. Under our specially negotiated Contract Works policy, an endorsement has recently been made available for provision of speculative homes and their contents from the time of issue of an Occupancy Permit until the home is sold. Cover is limited to 12 months or the next policy expiry date, whichever happens first. Clients should contact our office to advise if they have any unsold speculative homes so that we may discuss this option. 2

3 Dodgy dealers named and shamed over fake certificates Western Australia s Department of Commerce has urged consumers to check their builder s home indemnity insurance certificates after two cases emerged where builders may have used fake or forged insurance certificates. Building Commission Acting Executive Director Moshe Gilovitz said: Home indemnity insurance is an important protection for consumers. The Building Commission will continue to hold to account and name those who put consumer interests and the reputation of the building industry at risk. One builder was fined $20,000, in April, after disciplinary action was taken by the Building Services Board. The WA Administrative Tribunal found the builder guilty of forging five home indemnity insurance certificates for jobs in Perth. The builder had also started work on one of the sites without a building permit. In another case, an Adelaide-based builder was being investigated by Consumer and Business Services and South Australian Police after allegations that the company had used false insurance certificates while constructing almost 200 homes. Legally, in every state except Tasmania, builders and renovators must take out warranty insurance (or similar) for home building contracts once they pass various values depending on the state. The insurance protects consumers against financial loss and can be either a first or last resort system for claims if a builder cannot complete the job or rectify faulty workmanship, because of death, disappearance or insolvency. Only a limited number of insurers provide builders warranty cover and different States have different requirements. It can be tough for many smaller builders to meet the eligibility criteria for warranty cover because of the strict financial criteria required by insurance companies. In 2004, EBM introduced its team of specialist construction industry advisors to help small and medium building companies overcome the eligibility hurdles for builder warranty, third party liability and contract works insurance. Contact us any time to discuss your needs and requirements. 3

4 High tech building a peek into the future Imagine printing out an entire house in 3D and taking it to site to build? Or installing a giant inflatable elevator built from reinforced segments with pneumatically pressurised cells? Sounds like the stuff of sci-fi movies but these are real advances in technology that could just change the way we construct and build in the future. A building company in central China has devised a new 3D printing technology that enables an entire house to be assembled on-site in a matter of hours. The technology, developed by the Zhuoda Group, involves printing out the modules for entire sections of the house in a factory. The modules are then taken to the construction site and put together with a crane to form a complete new multi-storey structure. In July, the Zhuoda Group managed to complete a two-storey villa in Xi an complete with a living room, bedroom, kitchen and bathroom - in just three hours. Other companies in China are also pioneering efforts to bring 3D printing to the building sector, such as Shanghai s Winsun, which has used its own 3D printer to create a five-storey apartment building and 1100 square metre village at Suzhou Industrial Park. While Australia might not be ready to move away from its love affair with bricks and mortar and the corresponding skills and expertise of professionals who craft our homes prefabricated housing is becoming an increasingly popular construction technique. The University of Melbourne recently announced the establishment of the Australian Research Council Training Centre for Advanced Manufacturing in Prefabricated Housing. The centre aims to create a globally competitive prefabricated housing industry in Australia. It will explore innovative design and new building systems and materials, focusing on modular housing strategies and automated off-site construction and assembly techniques. So, how far can the industry go? One American company is designing a 20km tall tower to transport astronauts and cargo into the stratosphere. The company, Thoth Technology, was recently granted a United States patent for its tower structure which would stand 20 times taller than the current tallest tower on earth. Mindboggling! 4

5 Savings as National Construction Code goes online Australian builders and plumbers can save up to $400 by accessing the new National Construction Code (NCC), which has been published online for the first time. The free electronic release aims to boost the number of builders and plumbers using the NCC from 12,000 to around 200,000, and is part of a package of reforms endorsed by Australia s Building Ministers to reduce costs and improve industry productivity. Chair of the Australian Building Codes Board, John Thwaites, said the NCC would also now be amended every three years instead of every year to provide greater stability and certainty for the industry. The reforms adopted by the Australian Building Ministers Forum represent an important advance in the Council of Australian Governments deregulation agenda, Mr Thwaites said. The Board will now devote resources to simplifying the NCC and making it easier to use. The first NCC was agreed and implemented in 2011 to bring separate State building and plumbing regulations together in a single code. The NCC defines the technical building and plumbing standards that all buildings and plumbing systems in Australia must meet and sets minimum requirements for safety, health, amenity and sustainability in design and construction. It s used widely by architects, builders, plumbers, building certifiers and surveyors, hydraulic consultants and engineers. To access the NCC 2015 online edition, visit the Australian Building Codes Board website. The Board also offers online training kits to help businesses understand and use the code. 5

6 NSW lifts cap on Home Building Compensation Fund New insurance provisions, designed to cut red tape and remove annual contract caps for the Home Building Compensation Fund (HBCF), have been introduced in New South Wales. The changes made possible through the introduction of a new computer system replace previous annual limits and allow eligible builders to apply for insurance for new jobs as existing work is still being completed. NSW Minister for Innovation and Better Regulation Victor Dominello explained: Currently builders insured under the Home Building Compensation Fund are subject to a capped amount of insurance they can purchase each year, restricting the number of projects they can take on. We have listened to industry and these changes will make life easier for builders while maintaining the existing protections afforded to consumers to make compensation claims under the Fund. Industry associations have welcomed the move saying the annual cap potentially stifled the growth of some building companies by limiting the amount of work they were able to take on. The new system includes an online public register of insurance and warranty information, to increase transparency for both consumers and builders. The onus will be on builders to manage the process to best effect. Once a job reaches practical completion, builders will be required to advise their HBCF Broker by filling out a Builder Project Completion Advice form. The home owner is then notified by HBCF that the job is completed and the builder s open job limit is updated. Projects will stay open until a Completion Advice is received. P: F: enquiries@buildcover.com.au New South Wales Victoria Queensland Western Australia South Australia Coverholder at Lloyd s Global Broker Network Asia Australasia Alliance National Insurance Brokers Association Elkington Bishop Molineaux Insurance Brokers Pty Ltd AFSLN ABN Est 1975