Decennial liability insurance (DLI) is a 10-year no-fault insurance policy covering major structural defects in completed buildings. It activates if structural components (e.g. foundations, columns, slabs, load-bearing walls) fail and make the property uninhabitable or unsafe, regardless of fault or negligence.
This form of cover is standard in civil code jurisdictions (e.g. France, UAE, Qatar) and is gaining traction in Australia as regulatory expectations and consumer protections evolve.
This insurance is increasingly being considered or trialled in Australia, especially in the wake of high-profile structural failures like the Opal Tower in 2018 and the Mascot Towers in 2019 which were both evacuated following extensive cracking because of design and construction defects.
Why it’s now being recommended in Australia:
1. Protection Against Structural Defect Claims
DLI ensures developers and builders, are financially protected if a defect appears in the building’s core structure (e.g., foundation, columns, slabs).
It covers risks that may arise following the handover of the property to the client, even if the developer or builder is no longer involved.
2. Market and Investor Confidence
Offering a DLI policy shows that you, as a developer or builder are committed to quality assurance and accountability.
It can also improve buyer trust and confidence, especially for institutional investors or owner-occupiers concerned about building integrity.
3. Regulatory and Risk Management Shift
While not mandatory yet across Australia, NSW and Victoria are moving toward stronger post-construction liability frameworks (via the Design and Building Practitioners Act and Building Legislation Amendment Act). Governments are encouraging insurance-backed guarantees such as DLI, and developers who choose adopt such guarantees early are likely to be ahead of future mandates.
4. Differentiation in Competitive Market
With increasing scrutiny on developers following the ordeals with both the Opal and Mascot towers, builders and developers can use decennial cover as a differentiator—especially in government tenders, large urban precincts, or institutional projects including during:
- Project finance
- Pre-sales
- Government tenders
- Asset divestments.
5. Transfer of Risk
DLI shifts the long-tail liability risk for construction work from your balance sheet as a developer or builder to the insurer. This can help with financing, exit strategies, or selling down strata or mixed-use projects.
Perhaps most importantly, in todays climate Buyers and funders want to know “what happens after settlement?” DLI can provide that piece of mind.
