The NSW Parliament has passed legislation clearing the way for Decennial Liability Insurance to enter the Australian apartment market.
The insurance will provide eligible apartment buildings with ten years of protection against the cost of rectifying covered building defects.
Unlike protections that depend on pursuing a developer or builder, the policy will remain attached to the building. Owners may therefore remain covered even if the companies responsible for construction are no longer operating.
Insurance not yet available across the market
The passage of the Fair Trading and Building Legislation Amendment Bill 2026 establishes the final legislative framework required for insurers to develop and seek approval for DLI products.
However, apartment owners cannot yet assume every new building is automatically covered.
Building Commission NSW will now assess proposed insurance policies and determine whether they meet the legislative requirements before they can be offered in NSW.
The government has not announced when the first approved policies will become widely available.
Ten years of building protection
DLI is intended to cover defects affecting critical common-property building elements, including structural components, waterproofing and fire-safety systems.
Coverage begins after construction is completed and follows the building for ten years, including when apartments are sold to new owners.
It is designed as first-resort insurance, meaning an owners corporation may be able to make a claim without first proving negligence or pursuing the builder through lengthy court proceedings.
The detailed scope, exclusions and claims process will depend on the final policies approved by Building Commission NSW.
Stronger powers for property regulators
The legislation also expands the enforcement powers of NSW Fair Trading and Building Commission NSW.
Regulators will have clearer authority to refuse or cancel licences obtained through false information, administrative error or invalid qualifications.
NSW Fair Trading will also receive stronger powers to prevent unsuitable applicants from entering the conveyancing industry and remove licensees with serious misconduct histories.
Building Commission NSW will be able to continue disciplinary action against certifiers who surrender their registration after alleged misconduct, closing a loophole that previously allowed some practitioners to leave the industry before proceedings were completed.
Implementation still required
The legislation has passed Parliament, but several steps remain before the new insurance framework is fully operational.
These include formal assent, commencement of relevant provisions, approval of insurance products and preparation by developers, insurers and building regulators.
The immediate milestone is that the legal foundation is now in place. The practical protection for apartment owners will begin once compliant DLI policies are approved and taken out for eligible developments.