I’ve spent two decades watching how governance failures ripple through the insurance market. What’s happening in Victoria right now is one of those watershed moments that changes how we assess risk.
The corruption revelations around Victoria’s Big Build have forced liability underwriters to rethink everything about how we evaluate large construction projects. I’m talking about fundamental shifts in due diligence, policy terms, and the questions we ask before we write a single dollar of coverage.
This isn’t just a Victoria problem. What happens here sets a precedent for how we approach major infrastructure projects across Australia and beyond.
Victoria’s Big Build promised transformative infrastructure. The reality turned out to include systemic corruption, governance breakdowns, and ethical failures that ran deep into project management structures.
When corruption surfaces in projects valued at billions of dollars, the liability exposure doesn’t just increase. It explodes.
I’ve seen underwriters get burnt by assuming that government oversight equals good governance. That assumption is dead. The Big Build revelations proved that even high-profile public projects can harbor practices that create massive legal and financial liabilities.
What Corruption Actually Means for Liability Risk
Corrupt practices create multiple layers of exposure:
Legal liability multiplies when contractors, subcontractors, and project managers operate outside ethical boundaries. Every corrupt decision is a potential lawsuit waiting to happen.
Financial claims escalate because corruption often masks substandard work, safety violations, and regulatory non-compliance. When these issues surface, the claims come fast and they come expensive.
Reputational damage spreads across every party involved. In insurance terms, that means more claims from more directions than anyone anticipated.
The traditional risk models we used for large construction projects didn’t account for systemic corruption. We’re fixing that now. I can tell you exactly what’s changed in our underwriting approach since the Big Build revelations came to light.
Enhanced Due Diligence Has Become Non-Negotiable
We’re no longer accepting project documentation at face value. Every major construction risk now gets scrutinized through a governance lens that would have seemed excessive two years ago.
We’re asking questions about:
- Who makes decisions and how those decisions get documented
- What oversight mechanisms exist and whether they actually function
- How contractors get selected and what transparency exists in that process
- Whether whistleblower protections are real or just policy documents
- What audit trails exist for major project decisions
At Australasia Underwriting, we’ve always believed that understanding risk is the primary focus of our proposition. The Big Build situation has reinforced why that philosophy matters. We survey every significant property risk, and now we’re extending that same rigor to governance structures.
We’re writing policies with conditions tied to governance standards.
You’ll see more policies that require:
- Regular third-party governance audits
- Documented compliance with anti-corruption frameworks
- Transparent reporting of project decision-making
- Immediate notification of any regulatory investigations
This isn’t about making coverage harder to get. It’s about making sure everyone understands what behaviour gets covered and what doesn’t.
Projects with strong governance frameworks, transparent decision-making, and robust oversight mechanisms get better terms. Projects that can’t demonstrate these elements face higher premiums or coverage limitations.
The market is rewarding good governance and penalising opacity. That’s how it should work.
The ripple effects from Victoria’s Big Build extend far beyond current projects under investigation. You can’t fake good governance anymore. Not if you want competitive insurance terms.
We’re seeing smart developers and project managers invest heavily in governance infrastructure before they even approach the insurance market. They’re building transparency into their processes from day one because they know we’re going to look for it.
This represents a fundamental shift in how large construction projects get structured. Governance used to be a compliance checkbox. Now it’s a competitive advantage that directly affects your ability to secure affordable liability coverage.
The Broker Relationship Becomes More Critical
Brokers who understand the new governance requirements bring real value. They can help structure projects in ways that satisfy underwriter concerns while maintaining operational flexibility.
At Australasia Underwriting, we work exclusively with brokers. We’ve built our reputation on responsive service and clear communication about what we need to see before we can write coverage. The Big Build situation has made that relationship more important than ever.
Brokers who can articulate their client’s governance frameworks, who can provide detailed documentation of oversight mechanisms, and who understand what underwriters are looking for get better results faster.
The Bigger Picture: What Corruption Reveals About Systemic Risk
The Victoria situation exposed something larger than one project or one state. It revealed how corruption in major infrastructure creates systemic risk across multiple sectors.
When governance fails in high-profile projects, it affects:
- Insurance markets that have to reprice risk across entire sectors
- Financial institutions that fund construction projects
- Government agencies that approve and oversee infrastructure development
- Taxpayers who ultimately bear the cost of project failures
- Future projects that face higher barriers to entry because of past failures
I’m seeing underwriters across the industry recognize that corruption risk is interconnected with other forms of systemic risk. A failure in one area often indicates potential failures in others.
What You Should Do Right Now
If you’re involved in large construction projects, here’s what the current environment requires:
Documentation is key
Client governance processes need to be visible and verifiable including audit trails for major decisions. Look for evidence of selection and management of contractors and subcontractors. Demonstrate how oversight mechanisms function in practice.
Underwriters need evidence, not assurances.
Demonstrate Good Governance Infrastructure
Good governance costs clients money upfront but saves money on insurance premiums and reduces liability exposure.
This includes third-party audits, independent oversight, and clear reporting lines that separate operational decisions from financial interests.
Engage with Underwriters Early
Don’t wait until you need coverage to start the conversation. Talk to underwriters during project planning. Understand what they’ll want to see. Structure your governance to meet those requirements.
At Australasia Underwriting, we’re comfortable operating where others may not be. We look at complex risks that other insurers avoid. But we need to understand the risk thoroughly. The earlier you engage with us, the better we can structure coverage that works for your project.
The Path Forward
The Victoria Big Build corruption revelations forced a reckoning in the liability insurance market. That reckoning was overdue.
We’re now in a market where governance matters Where transparency affects pricing as much as loss history. Where the questions underwriters ask go beyond technical specifications to organisational culture and decision-making processes.
This creates challenges for projects that relied on opacity. It creates opportunities for projects built on solid governance foundations.
I’ve been in this industry long enough to know that major disruptions eventually settle into new norms. We’re in the disruption phase now. The new normal will feature higher standards, more transparency, and better alignment between good governance and affordable coverage.
That’s ultimately good for everyone. Better governance reduces claims. Fewer claims mean more stable markets. More stable markets mean more capacity for the projects that matter.
The path forward requires honesty about what went wrong in Victoria and commitment to doing better everywhere else. As underwriters, we’re holding up our end by demanding higher standards and rewarding projects that meet them.
The question is whether the construction industry will rise to meet this moment.
I think it will. The alternative is too expensive.
Get in Touch
If you’re working on a large construction project and want to understand how the current environment affects your liability coverage options, we should talk.
At Australasia Underwriting, we’re building solutions for the market as it exists today, not as it existed before the Big Build revelations. We bring expertise, Lloyds backing, and a commitment to transparent communication about what we can and can’t cover.
We find our best ideas through collaboration. Understanding your project’s specific risk profile helps us structure coverage that actually works.
The market has changed. Your approach to liability coverage should change with it.
Steve Ross is the Head of Casualty at Australasia Underwriting Pty Ltd (AUPL), a national underwriting agency specialising in complex property and casualty insurance. Based in Melbourne, Australia, AUPL works with insurance brokers across the country to find solutions for complex risks.
