OCBA - Insurance

Insurance

Your builder is usually responsible for insuring your home during the construction stage until it is officially handed over to you. This will depend upon the terms of the contract and, especially with addition and renovation contracts, you should read the contract carefully to determine if it is your or the builder's responsibility. However, it is your responsibility to protect and insure any items owned by you at the building site during the construction stage and beyond.

It is wise to have Public Liability Insurance in place during the building process. This may help protect you if an adverse event occurs on your building site where there may be perceived negligence on your part.

In South Australia any building work carried out in connection with a building work contract costing $12,000 or more and requiring Council consent, must be covered by a Building Indemnity Insurance policy. Your builder must ensure an indemnity policy is in force before starting work and your local council will also require that a policy be in place before granting development consent.

Under the Building Work Contractors Act 1995, there are statutory warranty benefits to guarantee that the building work will be done in a proper manner and in accordance with the agreed plan and specifications. The statutory warranty also covers the quality of the materials supplied in connection with the building work.

In the event that your builder dies, disappears or becomes bankrupt within 5 years from the date of completing the building work, you may be able to claim on the indemnity policy for any breach of the statutory warranty provisions. When the builder presents you with the policy certificate, familiarise yourself with the document as there are conditions that apply when making a claim.

If you are an owner-builder then when you sell the property you must disclose whether or not indemnity insurance is in place.

Your builder must provide you with a copy of the certificate of insurance. Keep it for your protection.

Important Note: Building work contractors are no longer required to take out building indemnity insurance in relation to constructing multi-storey residential buildings. A multi-storey residential building is a building that has a rise in storeys of more than three and contains two or more separate dwellings. A storey does not include a mezzanine or a space within a building if it is intended that the space contain only a lift shaft, stairway, meter room, laundry, bathroom, shower room, water closet, car park or combination of any of the above

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