An evolving insurance crisis and continued uncertainty about the status of national construction standards could force a slowdown in Canberra's construction boom, a peak industry body has warned.
But ACT Minister for Building Quality Improvement Gordon Ramsay has played down the fears, arguing the ACT is well placed to cope with a crisis engulfing building surveyors across the country.
The Australian Institute of Building Surveyors is worried local companies might decide to shut down over fears they won't be able to protect themselves if owners seek compensation for building defects or non-compliant materials, such as combustible cladding.
A reduction in the number of professionals to check building work for compliance would slow the process of approving projects across Canberra, the industry group has warned.
The industry group say two factors have coalesced to create a "heightened risk environment" for surveyors in the ACT; an emerging national crisis involving professional indemnity insurance and the territory government's decision to delay the adoption of the National Construction Code.
Building surveyors take out professional indemnity insurance to shield themselves against negligence claims.
Surveyors and certifiers across Australia are struggling to find suitable, if any, cover, as insurers seek to guard themselves from payouts, particularly in relation to flammable cladding.
The risk of claims has risen in the past two years, following high-profile building fires at London's Grenfell Tower and Lacrosse in Melbourne.
Insurance Council of Australia general manager of risk Karl Sullivan confirmed insurers had significantly increased their premiums in that time, while also restricting policies so they don't cover surveyors against claims involving cladding.
Mr Sullivan said professional indemnity insurance had historically been "very cheap", meaning the price hike was, in part, a market correction.
But he said the insurance industry was growing increasingly wary of the construction sector's exposure to claims, which had been underscored be the recent building disasters at Sydney's Opal Tower and Mascot Tower.
The Australian Institute of Building Surveyors chief executive Brett Mace said amid a heightened risk of litigation, professionals needed to be clear about what construction standards and regulation they were assessing buildings to.
Mr Mace said local surveyors remained confused about the status of building rules in the ACT following the territory's government's handling of the adoption of the National Construction Code.
In May, Mr Ramsay overturned decision made just days earlier to delay the code's adoption until September, after learning that bureaucrats had not consulted with key stakeholder before recommending that the industry needed more time to adjust to the changes.
Mr Ramsay decided the bulk of the code would be adopted on June 1, with the more contentious elements to be delayed until September.
Legal advice prepared for the the industry group, and seen by The Canberra Times, said the decision "unnecessarily increases risk to building surveyors practicing in the ACT and this is likely to place greater disincentive to insurers to continue to provide professional indemnity insurance".
The advice recommended Mr Ramsay agree to either adopt the code in full immediately, or on September 1.
On Monday, Mr Ramsay ruled out adjusting the adoption dates, saying it would create more uncertainty for the industry. He said the national and local branches of the surveyors' group had been consulted on the changes.
He said the ACT was in a "substantially better position" than other jurisdictions to handle fallout of the insurance crisis.
"Whilst we still require surveyors to be certified and have insurance, our system is flexible in that we have the ability to put conditions on individual licenses should their insurance include exclusions for particular types of work or the use of particular types of materials or products in that work," Mr Ramsay said.
Mr Ramsay said the issue needed a national responses, and planned to raise it at a meeting of Australian building ministers in July.