Why are insurers denying magnesite and concrete cancer claims in Sydney in 2026?

In 2026, many Sydney insurance claims related to magnesite flooring and concrete cancer are being denied because chloride contamination causes steel reinforcement corrosion over time. Once spalling begins, insurers often classify the damage as gradual deterioration or failure to maintain , which is typically excluded from standard home and strata insurance policies.

What is magnesite flooring and concrete cancer? Magnesite flooring is a legacy underlay system widely installed in NSW apartment buildings from the mid 20th century. While initially valued for acoustic and levelling performance, magnesite often contains chloride salts that migrate into concrete slabs.

Concrete cancer occurs when chlorides penetrate reinforced concrete and trigger corrosion in the embedded steel. As the steel rusts, it expands, leading to cracking, delamination, and visible spalling of the concrete surface.

Chlorides accelerate steel reinforcement corrosion Rust expansion fractures surrounding concrete Damage progresses internally before becoming visible How does this impact Sydney property owners or businesses? Sydney has one of the highest concentrations of ageing strata buildings in Australia. Many residential and mixed use assets still contain magnesite beneath carpets or vinyl, particularly in inner-city and coastal suburbs.

Once damage is discovered, owners often assume insurance will respond. In practice, insurers increasingly reject claims on the basis that the deterioration occurred slowly and could have been identified earlier through routine maintenance or compliance inspections.

Unexpected capital works costs for owners corporations Disruption to tenancies and commercial operations Increased scrutiny during strata and due diligence reports Why is this important for NSW projects or compliance? Under NSW building and strata legislation, owners corporations have an ongoing duty to maintain and repair common property. When magnesite contamination is identified, failure to act promptly can expose decision-makers to legal and financial risk.

Insurers rely heavily on engineering reports, historical maintenance records, and evidence of proactive risk management when assessing claims. Where documentation shows delayed action, exclusions are more likely to apply.

This is where integrated compliance systems matter. Elyment Property Services operates across physical remediation, professional services, and technology-driven verification to ensure risks are identified, documented, and managed before they escalate.

What does this typically cost or affect in Sydney? Costs vary significantly depending on building size, extent of chloride contamination, and access constraints. Early-stage intervention is materially cheaper than structural rectification after spalling has progressed.

Stage: Assessment and testingTypical Impact: Core sampling and chloride analysis Cost Exposure Range (Sydney): $5,000 to $20,000 Stage: Magnesite removalTypical Impact: Removal and slab exposure Cost Exposure Range (Sydney): $150 to $300 per m² Stage: Concrete remediationTypical Impact: Steel treatment and patch repairs Cost Exposure Range (Sydney): $25,000 to $250,000+ What are the risks or benefits? The primary risk is financial. Once insurers decline coverage, remediation costs transfer directly to owners or strata levies. There is also reputational risk for commercial assets where defects affect leasing, valuation, or financing.

The benefit of early detection is control. Buildings that implement structured inspection, verification, and documentation frameworks are better positioned to manage risk and demonstrate compliance.

Reduced likelihood of catastrophic structural damage Stronger position in insurance negotiations Improved asset longevity and governance outcomes Why choose Elyment Property Services in NSW? Elyment is not a single-service contractor. It is a technology-enabled operator that owns and runs complex physical, legal, and digital systems across NSW.

Elyment works with AI and automation to deliver business solutions grounded in real operational and compliance environments. This includes:

Digital verification of maintenance and inspection records Workflow automation for defect reporting and remediation Risk profiling for strata, commercial, and mixed-use assets By integrating physical remediation capability with compliance-aware systems, Elyment helps property stakeholders reduce exposure, improve governance, and make informed decisions based on evidence rather than assumptions.

Learn more about Elyment’s integrated approach to property services and operational capability or explore how its technology and automation systems support risk-aware decision-making.

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Sources & References NSW Fair Trading guidance on owner responsibilities in strata schemes Engineers Australia article on cracking the corrosion conundrum University of Sydney research opportunity on corrosion in reinforced concrete structures Australian Building Codes Board (via industry discussions on durability and corrosion in concrete)