What insurance do I need to ask for from my new home builder?
Is insurance the builders responsibility? Why do I need to ask for certificates?
The first thing to remember is: insurance is taken out for YOU, not your builder. To protect your build, you need to proactively ensure you have protection in case your builder abandons the project, becomes insolvent, or disappears. Finding out that you haven’t asked for the right evidence of insurance can cost you thousands in abandonment costs and time to engage a new builder.
Ask for these certificates before making any deposit payments on your new build:
These are the insurance policies that protect your new home build (specified in your Building contract):
Domestic building insurance (DBI). This provides cover for incomplete or defective works. If your builder becomes insolvent or unable to complete the work, DBI insurance covers fixing structural defects for six years and non-structural defects for two years beyond completion of the project.
Contract works insurance (CWI) covers loss or damage to the building work during construction. It finishes at the end of the project, unlike DBI. The cover amount for CWI is the contract value plus 15%.
Public liability insurance provides cover for personal injuries or death on the construction site. The cover should be not less than $5 million for one claim.
Here's what to ask your builder:
Ask for the policy and certificate for each insurance policy before paying the deposit on your new home build.
What happens if my builder won't share the insurance certificates?
Under all standard contracts in Australia, your builder must have all three insurance policies in place before requesting a deposit. It's essential to sight these certificates because if anything goes wrong during your build, you don't want to find out you had inadequate protection in place.
Remember the golden rule: protect your family's investment in your new home build. Make sure you're protecting yourself before worst-case scenarios happen.
Know exactly what you’re signing — before you build.
Protect your dream build with a Building Contract Health Check:
Avoid budget blowouts before they happen
Lock in a quality control processes from the start
Save your future self a huge amount of stress
Thanks for reading and catch you on my next post :)
Annelyse
Construction Management | M. Construction Law
