Ten years of protection, reshaped by the people who helped build it
Decennial Liability Insurance is the most significant change to defect risk in NSW apartment construction in a generation. Construction Legal hasn’t just watched this reform unfold from the outside. We helped shape it.
Advice built on the inside track
Our Principal, Jessica Rippon, was selected onto the NSW Government’s Ministerial Advisory Panel for Decennial Liability Insurance, representing the Owners Corporation Network of Australia in consulting with industry and government on how DLI should work. She has published on the subject in the Building and Construction Law Journal, “Closing the Gap: Decennial Liability Insurance – The Solution to the Strata Living Crisis in New South Wales”.
Jessica has advised leading insurers bringing DLI products to the NSW market on policy wording and product rollout. That’s a rare position to be in – Advising both the shape of the policy and the shape of the market that will deliver it.
What DLI actually is
DLI is a first-party, no-fault insurance product that covers the cost of rectifying serious defects in a building’s critical elements for ten years from completion, with cover following the building to successive owners. An owners corporation can claim directly against the policy without first proving who was at fault. That’s a major upgrade on the existing Strata Building Bond, which is capped at just 2 to 3% of contract value, nowhere near enough for a serious structural or waterproofing defect. DLI covers rectification up to the full construction cost and stays in force even if the developer or builder becomes insolvent.
Where it stands now
DLI’s path to law hasn’t been straightforward. Legislative groundwork began through amendments to the Strata Schemes Management Act 2015, but by October 2025 the market had stalled, with the provisions in place but no regulatory clarity for insurers to actually price and write policies. That gap has now closed. The Fair Trading and Building Legislation Amendment Bill 2026 passed NSW Parliament on 4 August 2026 and received assent on 14 August 2026, clarifying the defects DLI must cover and allowing eligible developers to satisfy their bond obligations with an approved DLI policy instead of the strata bond.
DLI currently applies to class 2 (apartment) buildings, with premiums expected between 0.6% and 2% of contract value. Build-to-rent developments and smaller buildings remain proposed exemptions. One issue worth watching: professional indemnity insurers retain subrogation rights for up to 24 months after a DLI claim is paid, so liability doesn’t disappear from the chain, it just moves where and when that fight happens.
How we help
- Advising developers, builders and insurers on DLI policy wording, scope and eligibility
- Structuring transition arrangements between the strata building bond and DLI
- Advising on duty of care and professional indemnity subrogation risk
- Assessing DLI implications for build-to-rent and other exempt structures
- Resolving disputes involving DLI claims, coverage and subrogation
Contact our team to discuss DLI, whether you’re a developer, builder or insurer.
