What we have seen in June renewals
June renewals remained attractive for low-risk SME consultants, but structural engineers, geotechnical engineers, certifiers, D&C contractors and cladding-exposed risks remain scrutinised. The SME sector is particularly active and attractive to insurers, with ample capacity available as insurers look to build their books within this perceived lower-risk area of the market. For larger and more established companies the market is mature, with fewer agencies and insurers targeting this part of the industry, the focus here remains on breadth of cover, longevity of the insurer, claims handling skills and proven expertise.
Certain activities and disciplines remain of concern for insurers, including high-rise residential, façade design, Design and Construct, certification, complex infrastructure projects, Brisbane Olympics and fast-tracked complex builds. Whilst there is reduced but sufficient capacity for those in the above disciplines, it remains vitally important for construction professionals to stand out from the crowd at renewal time, see our article on renewal strategy for further guidance.
The pipeline for construction consultants is impacted by uncertainty from the recent Federal Budget. There is significant uncertainty about the future of multi-storey residential apartments, particularly in the mid-market, with tax uncertainty for investors and potential first home buyers alike. Until the proposed budget changes are approved, development will likely stall, compounded by the seemingly ever-increasing cost of construction. Granny flats may become less attractive; however, there is great opportunity for new duplexes following demolition once the tax implications are clear, with strong demand for design professionals in the duplex new-build market. High-end retirement living apartments represent another potential growth area, with strong and continued demand. The renovation of the GST-free family home is also expected to return to popularity following a slowdown after the COVID-led renovation boom.
The Brisbane Olympics construction pipeline continues to impact the supply chain and availability of tier one contractors, with the general market feeling that stadium and infrastructure construction will come down to the wire. There is always great risk in fast-tracked projects, as quality building works may take a backseat to speed of construction, which will inevitably lead to claims. Insurers are watching this space carefully.
We expect to see the return of the hard market sooner than most may expect, perhaps in the next two to three years.
Premium pricing trends
Pricing is -5% to -15% for lower-risk SME consultants; flat to -5% for D&C, certifiers and valuers; and flat to +10% for cladding, high-rise, infrastructure or claims-affected risks. Insurance rates have dropped for SMEs but are now plateauing. Policy cover remains key in a soft market where sometimes the pendulum shifts too far from cover to price. We continue to see some troubling exclusions such as building products, PFAS and consequential loss exclusions in some wordings. For further information see our article on PI exclusions.
Insurer behaviour
Insurers are competing, but the class is structurally fragile because a single defect or aggregation event can change appetite quickly. We continue to see strong competition in all areas, which is a welcome relief after so many years of the hard market. However, we are concerned about more capacity providers leaving the market in the next couple of years once the long-tail nature of professional indemnity claims begins to materialise, and we have heard of some new agencies experiencing full limit losses.
Claims trends
Claims trends include design defects, certification disputes, water ingress, cladding, structural failure, delay claims, insolvency recoveries and consultant scope creep. We are conscious of the claims conditions that are developing and remain watchful of new agencies that may not have grown their premium pools sufficiently to cover such losses.
Insolvencies continue to be an issue in this sector. Client selection and debtor vigilance remain fundamental to the business, having a yes/no strategy for new projects or clients remains key, as is being prepared to say no.
The Brisbane Olympics is placing significant pressure on the Project PI market, creating significant aggregation issues. Government and contractors are asking lead consultants to obtain their own standalone Project PI policies with very high limits, applying significant pressure on consultants to take out considerably higher and more costly levels of PI than would ordinarily be the case. For further information around strategies for consultants to deal with these requirements see our article on Brisbane Olympics aggregation.
PFAS continues to evolve as a growing area of risk not just for those in the construction industry but other industries too. Safety in Design reports need to address this risk. For further information see our article on PFAS.
Legal and regulatory developments
Recent court decisions highlight the distinction between product liability, professional services liability and managerial/director capacity. The wrong programme architecture can leave a coverage gap.
There have been significant recent decisions from the courts on cladding:
Owners – Strata Plan No 87231 v 3A Composites GmbH (No 10) represents a recalibration of cladding liability after nearly a decade of expansive post-Grenfell Tower litigation. The court declined to convert regulatory and design failures into absolute product liability and reaffirmed the centrality of professional judgment in Australia’s construction system. While ACP risk is not extinguished for manufacturers, it is now more clearly defined. See our article on this decision for more information.
Owners Corporation 1 Plan No. PS 640567Y & Ors v Shangri-La Constructions Pty Ltd [2026] VSC 117 reinforces that insurance coverage follows the legal characterisation of liability, not simply the underlying conduct. For construction professionals, particularly those operating in dual capacities (technical and directorial), this creates a need for more deliberate programme design. They should seek expert advice from a specialist who intimately understands their profession with a view to helping them navigate nuanced risk trending issues. Please see our article for further insights on this case.
The Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd trading as Buildcorp Interiors [2026] NSWSC 27 is a timely reminder that the court will allocate responsibility and liability in accordance with the allocation of risk pursuant to legislation, the BCA and the contract, as opposed to assumptions around perceived industry practice. The contract and scope/non-scope remain key. The case also confirms recent judicial classification of removal of cladding as property damage, which is a significant concern for property insurers.
NSW Building (Approvals and Practitioners) Bill 2026 The Building Productivity Reforms are part of a targeted suite of reforms aimed at supporting the NSW Government’s housing supply efforts. The Government will not be proceeding with the full consolidation of building legislation as proposed under the Draft NSW Building Bill 2024 at this time, but this will likely occur over a future staged approach. The legislation aims to boost housing supply in NSW by slashing red tape and streamlining the process, and will be the first law in Australia to formally recognise and regulate modern methods of construction including prefabricated and modular building. The Reforms seek to deliver support for the uptake of prefabricated homes and modular buildings, faster and more streamlined building approval processes, more timely and cost-effective resolution of building defect disputes, and enhanced certifier accountability. Read further commentary here.
Victorian Building Reforms — The New One-Stop Watchdog
The Victorian building reforms come into effect on 1 July 2026. The centrepiece of the overhaul is the introduction of the Building and Plumbing Commission (BPC), a unified regulator combining the functions of the Victorian Building Authority, Domestic Building Dispute Resolution Victoria and Domestic Building Insurance. The BPC will handle oversight, insurance and dispute resolution and will be responsible for the 2% Building Bond, 10-Year Rectification Orders, Statutory Insurance Scheme, strict minimum financial requirements and Security of Payment changes of 20 days. Following the successful wind-down of Cladding Safety Victoria, the old Cladding Rectification Levy is being abolished, replaced by a streamlined Building Permit Levy on non-regional projects over $1.5M to fund the new BPC. Sweeping updates to the Domestic Building Contracts Act 1995 change how residential projects are paid for and managed, coming into full effect on 1 December 2026. The Victorian building overhaul could shift significant risk, design liability and compliance administration directly onto design professionals. While the laws primarily target builders and developers, the downstream impacts could fundamentally change how design professionals document projects, handle site inspections and manage their PI exposure.
Architects Regulations 2026 — Victoria
The Architects Regulations 2026, which commenced on 25 April 2026, replaces the outdated Architects Regulations 2015 framework with strict overhauls to professional registration, consumer protection and ongoing education. Key changes include a strict annual renewal framework requiring active application and verification by 30 June each year, replacing continuous registration maintained simply by paying the registration fee. Practicing architects, firms and non-practicing individuals must submit annual declarations regarding fitness to practice, professional indemnity insurance status and compliance. The 2026 framework also adds severe restrictions to prevent surprise contract terms, with architects no longer able to insert retrospective clauses or aggressively rush a client into a contract. Formal learning CPD criteria now require activities to link directly to two performance criteria, with the ARBV having expanded legal powers to demand comprehensive supporting evidence before granting any CPD exemption. The Architects Regulations 2026 in Victoria are designed to align closely with the NSW framework to facilitate Automatic Mutual Recognition, allowing practicing architects to work across both states seamlessly under their home-state licence.
AI and technology impact
BIM, design automation, AI drafting, digital QA and project dashboards can support claims defence, but they also create reliance and accountability issues.
What policyholders should do now
Review appointments, scopes, limitation clauses, reliance language, cladding exclusions, principal-controlled PI, aggregation wording and claims-made notification discipline. Construction professionals should seek expert advice from a specialist who intimately understands their profession in order to navigate nuanced risk trending issues and ensure programme architecture does not leave coverage gaps.
For insolvency risk, client selection and debtor vigilance remain fundamental, having a clear yes/no strategy for new projects or clients and being prepared to say no is essential.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
