Decennial liability insurance (DLI) is a strict liability cover protecting apartment owners from serious defects, that appear over a 10-year period from when construction is complete. Developers or builders will take out DLI to cover any costs associated with fixing serious defects of critical building elements in the common property. DLI provides cover up to the full construction cost value of the building works.

DLI is currently available for developers in NSW as a voluntary alternative to the Strata Building Bond and Inspections Scheme (SBBIS).

Benefits of decennial liability insurance

• As an insurance product of first resort, DLI protects owners from costs associated with remediating defects in their building, even if the developer or builder becomes insolvent. It removes the need to establish who was at fault which saves owners time and money often spent on litigation.
• DLI supports the NSW Government’s aim to ensure NSW apartment buildings are compliant, safe and resilient. Over time, it will encourage developers to build better-quality buildings which will improve consumer confidence.
• The additional checks required to secure DLI from a market insurer will incentivise developers to conduct best-practice building work to secure lower premiums. Insurers will also review the history of the company which will reduce issues of pheonixing (closing down a company to avoid paying debts).