NSW REGULATORY GUIDE
NSW Professional Indemnity Requirements for Builders
What NSW builders and design practitioners need to know about Professional Indemnity insurance under the Design and Building Practitioners Act - and why the 30 June 2026 exemption deadline matters.
1 July 2026
PI expected from
Class 2+
Building types
Adequate
PI cover required
THE SHORT ANSWER
The exemption that let registered building practitioners trade without adequate PI insurance is due to end on 30 June 2026. From 1 July 2026, if you do design work on Class 2 buildings in NSW, you're expected to need adequate Professional Indemnity cover.
There's no fixed minimum sum insured under the Act - you need cover that's adequate for the nature and risk of your work. A Bill introduced in February 2026 could extend the exemption again, but it hasn't passed, so the safe move is to be ready for 1 July. If you take on design responsibility, you may also need Design & Construct cover or a higher PI limit for the contracts you're chasing.
DBP ACT OVERVIEW
What's Changing for NSW Builders?
The Design and Building Practitioners Act 2020 (DBP Act) introduced significant reforms to the building industry in NSW. One requirement is that registered practitioners hold Professional Indemnity insurance that is adequate for their work.
That requirement has been exempted year by year while the insurance market developed. The current exemption is due to end on 30 June 2026, so from 1 July 2026 registered design and building practitioners are expected to need adequate PI cover to keep working on regulated buildings. A Bill introduced in February 2026 could extend the exemption further, but it has not yet passed.
What this means for builders:
If you do design work on Class 2 buildings (apartments) or certain other building classes in NSW, you're likely to need adequate PI insurance once the exemption ends. This includes builders who amend designs, provide specifications, or take design responsibility on projects - the same builders who often need Design & Construct cover as well.
WHO'S AFFECTED
Who Needs PI Insurance Under the DBP Act?
The requirements apply to different types of building practitioners. Here's who needs to prepare.
Design Practitioners
Registered design practitioners providing building design work for Class 2 buildings and related classes.
- → Architects providing building design
- → Structural, civil, mechanical, fire safety engineers
- → Building designers
- → Other regulated design practitioners
Principal Design Practitioners
Those who coordinate or manage design work across multiple disciplines on a project.
Builders Doing Design Work
Builders who don't just build to someone else's designs - if you do any design work, you may be affected.
- → Builders who take design responsibility on projects
- → Builders who amend or modify designs
- → Builders who provide specifications as part of their service
COMPLIANCE CRITERIA
What Are the Insurance Requirements?
The regulations require practitioners to hold Professional Indemnity cover that is adequate for the nature and risk of their work, rather than a fixed minimum sum insured.
Adequate Cover (No Fixed Minimum)
The DBP Act does not set a fixed minimum sum insured. You must hold PI that's adequate for the nature, size and risk of your work - and be able to show how you reached that figure.
Cover for Your Design Work
Professional Indemnity that responds to the design and professional services you provide, structured to meet the criteria in the DBP Act regulations.
Run-off Considerations
Liability for design work can surface years after practical completion, so cover that continues to respond after a project finishes matters.
Important note:
The specific insurance requirements are set out in the regulations under the DBP Act. We recommend checking the current regulations or contacting us for the latest requirements, as these may be updated.
KEY DATES
Timeline and Key Dates
The DBP Act requirements are being phased in over time. Here's the timeline.
DBP Act commenced - registration requirements began rolling out
The PI insurance requirement was repeatedly exempted while the market developed cover for building practitioners
An amendment Bill was introduced that could let the exemption continue - it has not yet passed Parliament
The current exemption from holding adequate PI insurance is due to end
Registered design and building practitioners are expected to need adequate PI cover to keep working on regulated buildings
ACTION PLAN
How to Prepare
Don't wait until the deadline. Here's what you should do now to ensure you're ready.
Determine If You're Affected
Consider whether your work falls under the DBP Act. Do you do design work on Class 2 buildings? Are you registered (or need to be) as a design practitioner?
Check Your Current Insurance
If you have Professional Indemnity cover, review whether it meets DBP Act requirements. Not all policies qualify - you may need specific wording or a higher limit.
Talk to a Specialist Broker
The intersection of construction and professional liability is complex. A broker who understands both markets can help you get compliant cover.
Don't Wait Until the Deadline
The closer we get to July 2026, the more demand for compliant PI Insurance. Getting sorted now gives you more options and potentially better rates.
Getting the Right PI Cover
Professional Indemnity insurance for building practitioners needs to be structured correctly to meet DBP Act requirements. We work with specialist underwriters who understand the construction industry and can provide compliant cover.
What your PI policy needs to include:
- ✓ Coverage for professional advice and design-related services
- ✓ A limit that's adequate for the size and risk of your work (the Act sets no fixed minimum)
- ✓ Run-off provisions for claims after project completion
- ✓ Wording that satisfies DBP Act criteria
Building work itself is covered separately - Contract Works insurance protects the project, while PI responds to your design and advice. If a contract demands a higher limit, see high-limit PI.
If you're unsure whether you're affected, or need help finding compliant insurance, call us on 02 9000 1155.
Our team understands both the regulatory landscape and the insurance market for building practitioners.
NSW REQUIREMENTS FAQS
Common Questions About DBP Act Insurance Requirements
RELATED COVER & GUIDES
Cover that goes with DBP Act compliance
Unsure if the DBP Act applies to you? Speak with a broker who places PI for builders and design practitioners.
Talk to a Specialist Broker →PI ENQUIRY
Check your NSW builders PI options
Tell us about the building work, registration context and policy deadline. A broker will help you work out the next step for DBP Act-related Professional Indemnity cover.
Need Help With DBP Act Compliance?
Don't wait until the deadline. Get Professional Indemnity insurance that meets NSW requirements and protects your building business.