LBP Cover

Protecting Licensed Building Practitioners from certain professional errors, including license complaints.

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What It Covers

Complaints to the LBP Board

Including defence costs and fines

Negligent Supervision

Allegations of negligent supervision of non-LBPs

Mistakes in Records of Work

Liability arising from errors or omissions in Records of Work documentation

What Is It?

According to the registrar of the LBP scheme, 20% of complaints to the Building Practitioners Board are related to Records of Work. Most commonly this is because the LBP has withheld them due to a dispute or non-payment, which you are not allowed to do.

Is your insurance adequate if a complaint is made against you, or you’re accused of making a mistake in your documentation?

Especially now that LBPs are subject to a Code of Ethics, a breach of which is also grounds for someone to complain to the board.

Definition

LBP Professional Indemnity insurance typically covers fines imposed by the Building Practitioners Board, including costs & expenses incurred in the investigation and defence of the complaint. It also covers claims of compensation related to errors or omissions in the signing of Records of Work that result in a financial loss to a third party. Lastly, it covers allegations of negligent supervision of non-LBPs, provided that the insured was engaged only in a supervisory role.

Explainer Video

This short video explains the key points of LBP insurance.

Speak to an Adviser:

0800 284 584

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Claim 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.

Policy Key Facts

This is meant as a summary of the most important items in 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
  • for the supervision cover to apply you must be engaged in a supervision-only role by the same entity that engaged the non-LBPs (the supervision of your own employees is not covered)
  • this is a “claims made” type of policy. This means you must have a policy in place at the time a claim is made against you, and the event giving rise to the claim must have occurred since you first took out LBP cover. Claims related to any event that happened before the retroactive date shown on the policy are not covered

How Much Does It Cost?

The legal cost of defending a complaint to the Building Practitioners Board, as well as the compensation awarded for making a mistake in your Records of Work documentation could easily run to thousands of dollars.

Premiums start from as low as $200+GST per year, depending on amount of cover you want.

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Terms & Conditions

View our current policy wordings. Existing policyholders may be on a previous version. Specific endorsements to this wording will be individually noted on your policy schedule. In some cases we may recommend an alternative insurer, if so we’ll send you their policy terms & conditions.

LBP Professional Indemnity Policy Wording

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