10 Oct In a Nutshell – Plumbing Work and Consumer Protection in Victoria
IMPORTANT CLAIMS HANDLING UPDATE
Any blog post in the Metropolis Solutions Blog Archive that includes any direct or indirect reference to insurance claims handling of any nature whatsoever, including any reference to existing and/or potential claims, was posted prior to 01.07.21, is for general information only and may also no longer be applicable due to recent changes in Federal Financial Services laws concerning claims handling. Please note that Metropolis does not hold an Australian Financial Services (AFS) Licence for claims handling and therefore qualified expert assistance on any insurance related matter, including Victorian Plumbers Warranty, should now be sought from a suitable lawyer or other expert holding an AFS claims handling licence. Metropolis Solutions can still consult on insurance claims handling matters, but only in the instance where we are directly engaged to do so by your authorised legal representative.
Need to know what’s covered under the Victorian Plumbers Warranty Insurance? Read on:
All Licenced Plumbers in Victoria are required to have mandatory insurance which provides them with comprehensive cover for both themselves and their clients. This is for very good reason as plumbing is inherently a very risky business.
What people may not necessarily understand is that not only is a licenced Victorian plumber insured for liability type disasters, but also for their actual workmanship. Self-certification of regulated plumbing work applies in Victoria and licenced plumbers are required to certify that their work complies with Part 12A of the Building Act – which drops down to the various Australian Standards and to the Plumbing Regulations 2018.
Unfortunately, what the forensic plumbing experts at Metropolis Solutions understand all too well is that regulated plumbing workmanship is often anything but compliant. Here are some common examples:
Above: The plumber forgot to connect the shower – hello black mould and a $50K bill to fix it
Above: It’s time to drain the swamp – another grossly non-compliant box gutter on a multi-unit residential development
Above: Roof plumbing resultant damage – it rains on the inside as well – this apartment is now completely unoccupiable
Should a claim be necessary under the comprehensive consumer protection provisions of the Licenced Plumbers General Insurance Order 2002 (“the Order”), the Order provides substantial coverage including for the following:
- Cost to rectify plumbing defects as defined in the Order. The minimum sum insured under this heading is $50,000 per ‘Home’, arguably though excluding “component parts” i.e materials. In the case of a multi-residential development each ‘home’ is a single apartment. The minimum amount potentially available to rectify defects is therefore $50,000 per home + materials.
- PLUS: The cost to rectify resultant damage such as interior and exterior water stains, damage to plaster walls, floors etc. Minimum coverage $5M.
- PLUS: The consequential financial losses sustained (domestic claims only) e.g. Loss of Rent and Temporary Accommodation costs. Minimum coverage $5M.
- PLUS: Reasonable legal costs and any expenses incurred to enforce any claim against the plumber or their insurer e.g. engaging solicitors, plumbing consultants and claims preparation costs; no limit noted in the Order.
- PLUS: Cover for practices by the plumber which contravene certain provisions of the Trade Practices Act (now the Australian Consumer Law). Minimum cover $50,000.
- PLUS: Cost to complete work that has already been paid for. Minimum cover $50,000.
- PLUS: Completed Works Liability as defined in the Ministerial Order. Minimum coverage $5M.
- PLUS: Due to operation of the Prohibited Provisions of the Ministerial Order, unlimited cover for defects arising from errors in design, specification, formula or pattern, or the provision of advice that is incidental to any plumbing work undertaken by the plumber
You need to look at the Victorian Plumbers Warranty cover a little bit like your own Home & Contents insurance policy. There may be some sub-limits e.g your diamond ring is specified as a particular item for $10,000 on top of a policy of $150,000 for other general contents, but if the whole lot got destroyed in an insured event, the insurer would pay out the total of the policy entitlements of $160,000 due to you.
Be warned that some insurers will also try and tell you that the absolute maximum payable under a Victorian Plumbers Warranty claim is only $50,000. This is false and misleading and is designed to lower your expectations and also diminish your knowledge of what your entitlements actually are. That’s a bit like telling you (after your house has burned to the ground) that they will only pay for the diamond ring (above) at $10,000 and will just forget about the other benefits to which you are entitled.
Unlike similar insurance such as Domestic Builders Warranty, the protections of the Licenced Plumbers General Insurance Order 2002 also don’t require the plumber to be dead, missing, bankrupt or in default of a VCAT order before any access can be gained to the insurance. In certain circumstances, the consumer can also make a claim direct on the insurer without the consent of the plumber – see Mandatory Provisions, Section 2, Clause 9 of the Order. In comparison to builders warranty the Victorian plumber’s warranty insurance is very straight forward and readily accessible, but particularly in any situation where the plumber cannot return or else refuses to return to rectify the defects, or else refuses to deal with a claim made against him. Many plumbers will also just hand such matters straight to their insurer anyway as they just don’t have the means to address significant defects at their own cost.
Metropolis Solutions provides an expert claims preparation service to assist property owners and Owners Corporations to navigate the at times complex claims preparation and submission process including dealing with the VBA (Victorian Building Authority) and the insurer of any plumber. We also work to fully prepare the claim so as to ensure that so far as possible, our clients recover every cent to which they are legitimately entitled. Metropolis can be engaged direct by any property owner, whether individuals, companies or Owners Corporations, and also via other means such as through your legal advisors. This work is charged either on a set fee or hourly rate basis depending on what is required; please contact us for more details.