Licensed plumbers left behind and why plumbing insurance in Victoria needs attention too

It’s hard to miss the major reforms currently rolling through the Victorian building industry. The Building and Plumbing Commission is taking shape, and we’ve seen massive shifts in how domestic building insurance (DBI) will be structured and regulated.

Overall, builders are facing tougher obligations, more scrutiny, and a rethinking of consumer protections.

But here’s what I find intriguing and frankly, a bit confusing: Where is the equivalent shake-up for plumbing insurance?

Also, I am not just talking about consumer protections, plumbing insurance premiums can skyrocket when claims are made and plumbing and plumbers need equal consideration.

Plumbers face similar risks to builders

Plumbers, just like builders, operate in high-risk, high-responsibility roles. In fact, defective plumbing workmanship can lead to serious property damage, water loss, health risks in relation to mould, or worse.

Resultant damage is an added risk to plumbing issues and by the way these aren’t always the plumbers fault as many perceive. In strata for one, I see maintenance as a common issue and theme but we need better cover for plumbing insurance in Victoria.

Current plumbing insurance framework is outdated

So, while DBI has been hugely revamped, plumbing insurance requirements in Victoria seem frozen in time. The Licensed Plumbers General Insurance Order 2002 is the regulatory framework established under sections 221ZQ and 221ZT of the Building Act 1993 (Vic) and for plumbing insurance in Victoria:

• It only applies for plumbing work which requires a compliance certificate; and
• Type B Gasfitting work is not required to be covered under the order; and
• ‘Minimum’ limits of cover are $50,000 per domestic compliance certificate and $100,000 for non domestic (ie commercial).
• Minimum meaning insurers can offer more under a policy complying with the order but I have not seen this. Basically, it doesn’t happen!

Time for parity in insurance obligations

This raises a few important questions: Why are plumbers treated differently in the risk and insurance framework? Plumbers and consumers shouldn’t expect less protection just because the work is “plumbing” and not “building”!

And from a risk and compliance standpoint we are creating blind spots for regulators, insurers, and practitioners?

Keep it real: Plumbing work is building work. It forms part of the same domestic construction process, and plumbers face similar (if not greater) exposure when things go wrong. So why is insurance reform only tackling one side of the equation?

As the Building and Plumbing Commission continues to evolve, now is the time for the plumbing industry to start asking hard questions about parity in insurance obligations and consumer protection. We’ve done it for builders. We can do it for plumbers too.

If you’re a licensed plumber, builder, insurer, regulator or simply involved in the industry this is something to pursue and watch. The risk doesn’t stop at the bathroom door.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• building law
• insurance law
• professional liability