BUILDING INSPECTOR PI CASE STUDY
Sole Trader Pre-Handover Inspector, $1M PI and $10M Public Liability After Occupation Declines
A builder with fifteen years' experience set up as a pre-handover inspection and defect-reporting consultant. Two insurers declined the PI on occupation before a specialist market offered terms, with a scope condition attached.
THE SITUATION
A sole trader in metropolitan NSW came to Tank Insurance for professional indemnity and public liability. After fifteen years in building, the client had set up a consultancy providing pre-handover inspections and building defect reports for residential properties: visual, non-invasive inspections of single and double-storey homes, with no subcontractors.
The client needed $1 million PI for the written reports and $10 million public liability for being on site, and wanted both in place before taking on inspection work.
OUR APPROACH
Building inspection PI is assessed on the exact reports issued rather than on the business title, so the submission set out the inspection scope, the report types and the client's building experience in detail.
- PI went to five markets. Two declined on occupation, two referred the risk for underwriter review, and one specialist market offered terms.
- Public liability went to seven markets. Four quoted between approximately $500 and $600, two referred, and one declined on occupation.
- The specialist PI market attached a scope condition: terms were available on the basis that the client performed pre-purchase building inspections only. That matched the business as described, so it was accepted rather than negotiated.
THE CHALLENGES
Some insurers group inspection consultancies with certifiers or with builders taking design responsibility and decline the occupation. The scope condition on the successful quote is the flip side of that: the market was comfortable with inspection reports, not with anything that looked like certification or construction advice.
Presenting the fifteen years of building experience alongside the narrow inspection scope gave the underwriter both the competence and the boundary it needed.
THE OUTCOME
$1 million professional indemnity was placed with CFC at approximately $1,700 a year, and $10 million public liability with the same insurer at approximately $500 a year.
Final Solution: PI at around $1,700 and public liability at around $500 for a sole-trader pre-handover inspector, with the NSW small business insurance duty exemption applied to the PI on the client's declaration.
This case records one historical outcome; current insurer appetite, premium, timing and terms depend on the complete risk at the time of application.
For the wider buying context, see our building inspector PI guide and the professional indemnity insurance brokers page.
BUILDING INSPECTOR QUESTIONS
What this placement answers for other inspection consultants
How much does professional indemnity cost for a building inspector?
Why do insurers decline building inspectors for PI?
Does the PI policy cover pest and pool inspections as well?
BUILDING INSPECTOR PI
Put this placement in context
Case-study results are historical and are not a promise of current pricing, capacity or policy terms. This page is general information only and does not take account of your objectives, financial situation or needs.
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