New legislation in Queensland serves as a timely reminder of the potential insurance implications regarding assumed liabilities for those working within other states and territories.
On the 1st August 2025, as part of the modernisation of the Queensland property law regime under the Property Law Act 2023 (Qld) (the ‘Act’), the limitation period for Deeds in Queensland changed from 12 years to 6 years. Sensibly, this aligns the limitation period for Deeds in line with the 6-year limitation period for contracts.
Whilst the Act was passed back in 2023, the Government allowed time for the industry to adapt to the new regime and this “adaptation” is of particular concern to consultants in the construction industry.
Contract v Deed – limitation period differences
Where there are differing limitation periods, for example 6 years under a contract and 12 years under a Deed, by signing a Deed consultants are assuming an extra 6 years of potential liability when compared to signing a contract.
Professional indemnity insurance policies typically include a contractually assumed liability exclusion. This means that any liability a consultant assumes under contract that is greater than its civil liability – under the common law (negligence), legislation– is excluded from cover and agreeing to such an extension of the limitation period offends the contractually assumed liability exclusion.
Whilst signing up the consultant to a Deed appears to be beneficial to the end client, all it really does is expose the consultant to uninsured liability and does not achieve any real protection i.e. the proceeds of insurance for the client.
The Problem
We have recently seen clients in Queensland requiring consultants to agree, via contract, a 12-year limitation period. Under contract it is possible to “contract out” of the legislated limitation periods stipulated within the Act.
We recommended against agreeing to any such clauses because, as stated above, they offend the contractually assumed liability exclusion in a professional indemnity insurance policy and create uninsured exposure for consultants.
We encourage all Architects, Engineers, QS’s and other construction industry professionals to stand together confidently on this issue and resist such contract terms, by doing so, there is potential to stop this new practice from becoming industry standard.
Furthermore, it will be interesting to see whether the Queensland Government will seek to contract out of its own legislation. Unfortunately, we have seen the NSW Government contract out of the proportionate liability regime in the Civil Liability Act 2002 (NSW) for many years and it would not be unsurprising if the Queensland Government followed suit.
Governments in Australia are required to adhere to the “Model Litigant” rules during litigation. We, and our industry partners, are of the view that Governments should also be a “Model Contracting Party” by adhering to their own legislation.
Other States
The issues discussed above apply equally in other States. For example, in NSW the limitation period in contract is 6 years and under a Deed is 12 years. The same principles discussed above apply across the Commonwealth – consultants should resist signing a Deed.
| Limitation periods | Contract | Deed |
| Queensland | 6 | 6 (previously 12) |
| NSW, ACT, Tas, WA | 6 | 12 |
| SA, Vic | 6 | 15 |
| NT | 3 | 12 |
Summary
Beware of the insurance dangers in signing up to a Deed instead of a contract. In Queensland, consultants should note the new limitation period for a Deed and not agree to contract out of the new reduced limitation period.
