Deciphering Owner Builder Insurance Requirements Across Australia

Embarking on an owner builder project is an exciting venture that comes with its unique set of responsibilities and risks. Protecting your project and the people involved is paramount, and the right insurance coverage is key to ensuring peace of mind throughout the construction process.

Here are five crucial insurance covers every owner builder needs to be aware of, and which of those are mandatory according to state regulations.

What is an Owner Builder?

An Owner Builder is an individual who chooses to construct a new dwelling, or renovate an existing one, on their own property without engaging a licensed builder. In essence, the owner builder takes on the role of a registered builder, assuming responsibility for overseeing subcontractors, and sometimes doing the work themselves.

To become an authorised owner builder, you must apply for the necessary owner builder permit through your state's regulatory body and complete the required training. For more information, we've listed the relevant websites at the end of this article.

5 Insurance Policies Owner Builders Need to Know About

1. Owner Builder Contract Works and Public Liability Insurance
As an owner-builder, the safety and security of your construction site fall under your responsibility. Owner Builder Contract Works Insurance provides comprehensive protection against a spectrum of risks including adverse weather conditions, water damage, fire, vandalism, and theft. Public Liability Insurance will usually be included as part of an insurance package, which covers you in the event someone is injured on your property. This duo ensures that both your project and third-party individuals are safeguarded against unforeseen incidents.
2. Voluntary Workers Insurance
For those lending a hand without financial compensation, including friends, family, or any volunteers, Owner Builder Personal Accident and Volunteer Workers Insurance is vital. This policy covers lost wages due to injury, compensation for permanent injuries, and death compensation. Normally, Voluntary Workers Insurance is an optional add on to Owner Builder Contract Works and Public Liability Insurance.
3. Owner Builder Home Warranty Insurance
If your owner builder project is in Victoria or Western Australia and you plan on selling the home within the statutory warranty period, it is mandated that you have Owner Builder Home Warranty Insurance. Owner Builder Home Warranty Insurance protects purchasers in the event the Owner Builder dies, disappears, or becomes insolvent and is unable to fix defective work during the statutory period. The statutory period is different in each state. For WA it's 6 years, for VIC it's 7 years. For owner builders in other Australian states planning on selling their home, the buyer may request that you take out this policy, which you can choose to do so at your own discretion.
4. Home Warranty Insurance
Many of the regulatory bodies will tell you that Home Warranty Insurance is mandatory if your project is valued over a certain amount. However, this only applies if you are using a licensed contractor. If the work exceeds the specified amount, the licensed contractor is responsible for taking the policy out. Your responsibility as the Owner Builder is to make sure that they have this policy in place and to check the insurance certificate's legitimacy. Some governments provide a website where you can check for certificate registration, otherwise you can request information from the insurance provider to ensure everything is up to scratch. Be sure to do this before any work starts and before you pay any money to the contractor.
5. Workers Compensation Insurance
If you are using any contractors to carry out work on your site, they could be deemed an employee and therefore, you may be required to take out Workers Compensation Cover. As there are several factors that determine whether a contractor would be considered your employee, it can be challenging to identify where your responsibility lies. Even if the contractor has Workers Compensation cover, you may still be required to take out a policy. It is best to call your state's government regulatory body or reach out to Coverforce to help you navigate your insurance responsibilities on 1300 255 747.

Government Regulatory Bodies by State

For further information on how to register as an Owner Builder, as well as the associated requirements and responsibilities, visit your state's government regulatory body website.

The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.

Find this article helpful? Click on one of the links below to share the content.

Deciphering Owner Builder Insurance Requirements Across Australia