LBP PROFESSIONAL INDEMNITY INSURANCE

According to the registrar of the LBP scheme, 20% of complaints to the Building Practitioners Board are related to records of work. Is your insurance adequate if a complaint is made against you, or you’re accused of making a mistake?

Builtin’s policy is designed for individual LBP license holders. It covers:

  • The costs of defending a complaint to the Building Practitioners Board
  • Liability for damages from mistakes made in RBW Records of Work documentation
  • Claims arising from LBPs supervising non-LBPs performing restricted building work

EXAMPLES

SUPERVISION AND SIGN OFF
Roger, an LBP, was engaged by ABC Limited (ABC) to supervise and sign off on the construction of foundation and framing for a residential build. ABC had LBPs for the other aspects of the work required. Roger signed off on the foundations and framing but it transpires that the Record of Works incorrectly noted the grade of timber used and that the actual grade of timber used was inappropriate. This was discovered just as the bricklayer was about to start. ABC had to remove the framing and replace it. The build was put back by two months and so the customer lodged a complaint to the Board against ABC and Roger. The customer also provided ABC with an invoice for additional rental costs they incurred as a result of the delay. ABC told Roger he needed to pay the rental costs and rectification costs. The costs for defending the complaint and any resultant fine are covered. The claim for damages in the form of additional rental costs is covered. Any defence costs associated in settling the rental costs claim are covered.
SIGNING OFF RECORDS OF WORK
XYZ Building Company (XYZ) was engaged to build a residential house for a client. Steve is the only LBP that they employed and he supervises the build, including work undertaken by other non-LBP employees and subcontractors engaged by XYZ. On completion of the project Jack signed the Records of Work. Two years later the client called to say that the windows weren’t sealed properly and resulted in water ingress causing damage to the building. The client made a complaint to the Board against Steve personally and also bought a civil claim for compensation against XYZ to get the work corrected, alleging that the documentation was a guarantee that the work was competently completed. The defence costs and fine in respect of the Board complaint against Steve are covered. The defence costs for the civil claim against XYZ are covered because the claim relates to an alleged error in the documentation. In terms of a settlement, there would be a contribution under the insurance for any financial loss damages claim (i.e. additional rental costs or interest on loan payments); however, the cost of rectification would either fall to XYZ or to a Builders Guarantee policy.

HOW MUCH DOES IT COST?
The legal cost of defending a complaint to the Building Practitioners Board, as well as the damages awarded for making a mistake in your record of work documentation could easily run to thousands of dollars. Given the risk, LBP Professional Indemnity Insurance makes good sense.

Premiums start from as low as $250 + GST per year, depending on amount of cover you want.

POLICY KEY FACTS
This is meant as a summary of the most important items of the policy.  For a complete understanding of what it does and doesn’t cover you should always read the full policy wording.

WHAT'S COVERED
  • Defence costs and resultant fines from a complaint to the LBP disciplinary board
  • Liability for financial losses suffered as a result of errors and omissions in Record of Work documentation
  • Liability for financial losses suffered as a result of supervision of non-LBPs performing restricted building work
WHAT'S NOT COVERED
  • the cost to fix defective workmanship
  • performing or supervising work outside your license class
OTHER THINGS YOU SHOULD KNOW
  • an excess is payable for each claim

POLICY TERMS & CONDITIONS
LBP Professional Indemnity Insurance