You already know that the builder you hire should have a valid licence, but that’s not all you need to ask of them. Appropriate insurance coverage is also essential.
Builders can carry many types of insurance to protect themselves and their clients from accidents or damages caused by unforeseen setbacks or construction faults. This is consistent in all States and Territories, although the titles of the various insurance policies could vary. Read on to know the different types of building insurance and why you need to know all about them.
It’s not wise to simply assume that your builder holds the required licence, insurance and registrations. While licences and registrations let you know that a builder is fully qualified to handle your project, they don’t really account for problems that may occur during the process. Choosing an insured builder will protect you from unfinished jobs, faulty work, paying for on-site accidents, and so on.
Projects with total costs of more than $10,000 should have Home Warranty Insurance. The cost may be incorporated into your quote, but if not, ask them about it. A trustworthy builder will be happy to show you their qualifications and other relevant evidence of their professionalism.
Ensure your builder is insured so that both of you are protected through the completion of your building project.
Home Warranty insurance, also known as domestic building insurance, ensures the client is protected if the builder cannot or will not finish the project or fix construction errors. It covers occurrences such as the builder going out of business, disappearing or dying. It is a legal requirement for work costing over $10,000, although this amount can vary in different States and Territories.
Public Liability insurance ensures the builder has protection against any claims arising from accident or injury due to their work activities. It ensures legal liability for any financial costs and payouts are covered. It also gives you, the homeowner, indirect protection in the event the builder is not covered. Otherwise, you could be held liable.
Professional Indemnity insurance protects builders and other professionals such as structural engineers, architects and draftspersons. It also ensures legal liability for any financial costs and payouts are covered.
Builder’s Indemnity or Structural Defects insurance ensures builders are covered if any structural defects in their work make them responsible for rectifying those defects. That insurance means they don’t have to cover the costs of fixing any faults.
Make sure you keep this information in mind when you compare quotes from builders for your next building, extension, or renovation project.