The NSW parliament has passed legislation allowing provision of decennial liability insurance for new apartment buildings.

The state government says the Fair Trading and Building Legislation Amendment Bill is a “crucial step” in getting DLI to the market.

“Passage of the bill means insurance providers have the confidence they need to seek review and endorsement for their DLI policies so they can be rolled out across NSW,” the government said.

“Building Commission NSW will work with various prospective DLI providers to help align their policies with the new legislative requirements and ensure they are fit for purpose.”

DLI is taken out by developers to cover major defects in new builds for up to 10 years.

“For the first time in Australia, apartment owners will be backed by an insurance product that guarantees this depth of protection over 10 years,” the government said.

“Importantly, DLI stays with the building, so even if a developer or builder goes out of business, apartment owners remain protected.”

Building Minister Anoulack Chanthivong says too many apartment owners have faced the stress and uncertainty that comes with major building defects.

“Decennial liability insurance will be a nation first, giving homeowners and buyers the peace of mind that if something goes wrong, they won’t be left to deal with it alone,” he said.

DLI specialist Resilience Insurance says the NSW bill is “what good, evidence-based regulation looks like”.

“An owners’ corporation no longer has to work out who is liable, find them, and fund the finding out before anything gets fixed,” the underwriting agency said on LinkedIn. “If the builder is no longer there, the cover still is.

“Resilience latent defects insurance has delivered this cover in NSW since 2022, protecting thousands of apartments, so there is already real-world evidence of how decade-long, no-fault protection works in practice.”