By Justine Northcott
You’ve made sure your builder offers Home Warranty insurance, but what other types of insurance protection do you need?
Under the Building Act 1993, your builder and tradespeople must carry insurance that protects against structural defects, legal liability and injury. These insurance types vary from state to state, but the most common are as follows:
Builders All-Risk/ Builders Indemnity: This covers the loss or damage to materials and work. Without it you risk time delays and inconvenience, as well as disputes if materials are damaged or stolen.
Public Liability: This covers the builder or tradesperson if anyone is injured as a result of the building work. If your builder or tradesperson does not have this type of insurance, you could be liable because you own the property.
Workers Compensation: This insurance covers employees who are injured on the building site, so it is important to make sure all employees that are appearing on your site are covered by their employer for workers compensation. If employers are not insured you could be liable to pay the costs of any claim.
If your builder or tradesperson doesn’t operate under a trade or company name, they can’t take out workers compensation insurance; in which case you may want to consider taking out your own minimum premium insurance just in case.
Before you sign the building contract, ask your builder to supply a
list of tradespeople who will be working on your job and what insurance
cover they each hold. Also ask for evidence that their insurance
certificates are current.
If you're renovating or extending an existing home, find out if your home and contents insurance policy will cover damage or theft to your home during the period of construction. Notify your home insurance provider in writing of your building intentions before construction begins, as some insurance companies may refuse cover if they are not pre-informed of the work.
Granted there’s a lot of time and effort involved with making sure you do a thorough insurance check before you start, but if anything goes wrong while you’re building you’ll be thanking your lucky stars!