How Builders Warranty insurance works
- Builders Warranty insurance provides cover against losses due to a builder’s failure to complete work or defects if they have died, disappeared or become insolvent
- Legal requirements for Builders Warranty insurance vary across states and territories
- Contractors are responsible for purchasing Builders Warranty insurance when it’s required
Confused about Builders Warranty insurance? You’re not alone. Here are the basics.
Are you building a house? A pool? Or maybe a much-needed extension? Whatever it is, planning your project and seeing it through to completion can be an exciting experience.
Hopefully your licensed builder will do a great job and your dream will become reality without any major hitches. But things can and do go wrong and, if your contractor doesn’t deliver the finished product or their work isn’t up to scratch because they are no longer around, you can be left out of pocket. That’s where Builders Warranty insurance may come into play.
What is Builders Warranty insurance?
It’s insurance that covers a builder’s client for loss of deposit, failure to start or finish a job and defective work on a completed job. If this happens to you, the first step is to try and recover your costs directly from your builder. But if they’ve died, disappeared or become insolvent that might not be possible. If so, you may be able to claim on the Builders Warranty policy covering your building contract.
Is Builders Warranty insurance a requirement in my state?
The rules vary from state to state, but in many places it’s a legal requirement for jobs above a certain dollar amount. Different states also give it different names, but the basic legal protections are the same.
This information is intended as a general guide only. Please check with you local building authority for the most up to date information.
How do I get Builders Warranty insurance?
You don’t have to do anything. If Builders Warranty is a legal requirement for your project, your licensed builder will purchase it for you. No building work should be done without it. Your licensed builder must submit proof of insurance to your local council as part of the development application.
When you sign a contract with your builder, they should provide you with a copy of the Builders Warranty certificate (which details your building contract). You’ll need this certificate to make a claim.
For more information
Licensed builders can learn more on QBE’s Builders Warranty page.
If you’re an owner builder looking to sell your home, visit Owner Builder Warranty to find out whether you need cover.
