Owner Builder Insurance

Insurance is, by its very nature, a minefield. We live in a litigous society where responsibility equals liability. Therefore you need to ensure that every possible risk is managed when you are Owner Building.

Some Owner Builders undertake projects with little or no regard for insuring themselves and their project against the variety of risks involved. Crazy but true. Always remember that as the Owner Builder, you are the Principal Contractor.You are responsible, and therefore liable. Cover all angles, and don’t just assume that you will be covered.

Following are some of the insurances you should have and some that you may wish to consider, depending on your circumstances. 

What insurances must you have?

Although it varies from state to state, a simple rule to follow is: Find an expert, eg. a broker in the field of construction insurance. Specifically find out what their experience is with insuring Owner Builders in your state. There are many insurance brokers around, but just as many of them are specialised and not all of them would have any idea what insurance you should have! If you want a referral then ask us.

Here are some general rules of thumb that will support you as the Principal Contractor/Project Manager when it comes to insurance, always:

1. Use contracts with your tradespeople and suppliers. 
2. Take copies of all of the current licences of all of your tradespeople. 
3. Take copies of all of the current insurance policies owned by all of your tradespeople. This includes but is not limited to:
   a. Home Warranty policy specific to your project.
   b. Workcover policy.
   c. Public Liability policy. 
4. Take copies of all of the current OHS/WHS general induction certificates (these are often issued as a card with different colours in each state).

Now for some of the policies that you need to consider…

Structural Warranty Insurance

Sometimes referred to as Home Warranty Insurance or Home Indemnity Insurance. This is a complex policy and differs in every state. This insurance is available and compulsory for licensed builders. Depending on your state you may be required to source a home warranty insurance policy from the trades that are working for you to cover their specific area of structural workmanship.

Generally speaking you do not need to take out Home Warranty Insurance. However if you sell your property within 6 or 7 years (depending on the state you are in) you will need to take out a Structural Warranty Insurance Policy prior to the sale and you will also need to note on the contract of sale that the property was owner built.

Home Warranty Insurance in the Building Industry is a minefield. It is recommended you seek professional advice from the state body that governs this area of insurance.

WorkCover or Workers Compensation Insurance

As you are the Owner Builder you are not covered by any Workers Compensation Policy as this is not your place of work, ie. you don’t do this for a living. You need to have a personal injury policy and/or income protection in case you have an accident.

Visit Owner Builder Advice for more information.

Talk to the experts. Make sure you have full and proper cover.