Home Indemnity Insurance Brokers
Do you operate a residential building business in WA, speak to our expert about Home Indemnity Insurance.
Home Indemnity Insurance
Do you operate a residential building business in WA, speak to our expert about Home Indemnity Insurance.
What is Home Indemnity Insurance?
Home Indemnity Insurance (HII) protects against financial loss if a builder cannot complete residential building work or meet a valid claim for faulty or unsatisfactory building work because a ‘relevant circumstance’ exists in relation to the builder.
A relevant circumstance can occur if:
- the builder is an individual and the builder dies, disappears or becomes insolvent; or
- the builder is not an individual, such as a corporation, and the builder ceases to exist or becomes insolvent.
A ‘relevant circumstance’ can arise if the State Administrative Tribunal (SAT) cancels a building services contractor registration, or the Building Services Board (BSB) does not renew such a registration. In this ‘relevant circumstance’, cancellation by the SAT or non-renewal by the BSB must have occurred because the builder failed to satisfy the financial requirements prescribed in regulations under the Building Services (Registration) Act 1991 (WA).
In most instances, the Home Indemnity Insurance policy must cover the residential building work during the construction period and for six years from the date of ‘practical completion’ (the six-year insurance period). Practical completion is when the building, extensions or renovations are completed and ready for occupation.
The Act applies to all areas of the State; however, the provisions of the Act are different when a person builds, extends or renovates their own home as an owner builder, or a builder seeks exemption to build their principal place of residence.
In most instances, the Home Indemnity Insurance policy must cover the residential building work during the construction period and for six years from the date of ‘practical completion’ (the six-year insurance period). Practical completion is when the building, extensions or renovations are completed and ready for occupation.
The Act applies to all areas of the State; however, the provisions of the Act are different when a person builds, extends or renovates their own home as an owner builder, or a builder seeks exemption to build their principal place of residence.
For the latest information, please contact Bruno Rocha in our Perth office on 0419 149 043 or visit the Department of Commerce
website: https://www.commerce.wa.gov.au/publications/home-indemnity-insurance
website: https://www.commerce.wa.gov.au/publications/home-indemnity-insurance
Links for Application Forms and supporting Documentation
Why I need
Home Indemnity Insurance?
In Western Australia, residential building work contracts are governed by the Home Building Contracts Act 1991 (the Act) and relates to any residential building project valued at over $20,000 (subject to certain exclusions). It is a requirement for a builder to take out Home Indemnity Insurance.
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Frequently Asked Questions
What does Home Indemnity Insurance cover?
It covers homeowners for loss of deposit, incomplete or defective building work if the builder dies, disappears, or becomes insolvent.
I’m a licenced builder, is Home Indemnity Insurance compulsory?
If a home is being built or renovated, in most cases, it’s a mandatory requirement that a builder takes out Home Indemnity Insurance.
Who is responsible for the Home Indemnity Insurance policy?
The builder carrying out residential building work on behalf of an owner is responsible for taking out the policy and for giving the owner a copy of the certificate of insurance BEFORE:
- starting any residential building work;
- asking the homeowner to pay a deposit; or
- asking the homeowner to pay any other money under a residential building contract.
Does Home Indemnity Insurance cover reduce a builder’s liability?
No, the policy comes into effect only if a ‘relevant circumstance’ exists; in all other cases a builder will remain responsible for claims made by a homeowner (or owners of the home thereafter) during the six-year period following practical completion.
What happens if I don’t take out Home Indemnity Insurance?
A builder who is required to take out the insurance can be prosecuted and fined. They may also risk losing their builder’s registration.
Why use Cowden Insurance Brokers?
Cowden Limited is an approved QBE distributer; we have the experience to arrange what you need as a licenced builder.