Insurance is such an important part of any building process. It covers you should things go wrong, ensures the health and safety of the people on your site and will provide peace of mind.
Therefore, when choosing your builder, regardless of whether it is a small renovation or custom built new home, it is important to check what types of insurances they hold and what will be covered in the case of theft, damage or delay. Professional builders should have public liability and construction works; workers compensation and QBCC (Home Owners Warranty Insurance) insurances. It’s important to make sure that the builder you go with has evidence of all of these.
Public Liability and Construction Works Insurance
Public liability and construction works insurance is taken out by your builder to protect against loss or damage during your build.
It includes both your build and the items on site and provides broad accidental damage cover for fire, theft, water damage, floor, malicious damage, storm and cyclones, landslips and earthquakes.
The public liability element covers third party property damage, as well as injury as a result of negligence.
Workers compensation is a legal requirement in every state for all employers, not just builders. It covers employees in the event of injury at the workplace. In Queensland, the main provider is WorkCover.
Home Owners Warranty Insurance
QBCC, otherwise known as Home Owners Warranty Insurance, is compulsory for residential building work valued over $3,300 (inclusive of labour and materials). The builder will pay a premium to the insurance provider before work begins, with this amount included in your contract. You will also receive a notice of cover before work begins, which details what is being done, the builder and how much was paid.
It should cover you in cases where the builder doesn’t complete the work specified in your building contract and you terminate the contract; the builder doesn’t fix any defective work or the end result suffers from subsidence or settlement. The insurance lasts for six years and six months from the earliest occurance: the insurance premium being paid, the contract being entered or the work commencing. Should you make a successful claim during this time, the builder is required to cover costs.
There are some time limits on making a claim – for a structural defect, a complaint must be lodged within three months of noticing the problem, while for non-structural defects, the timeline extends to seven months.
These insurances, and the benefits in the case of a successful claim, mean it is imperative you have a legally binding building contract. Any builder who does not offer this is breaking the law and therefore you should stay clear of them.
That said, it’s also a good idea to discuss your plans with your own home insurance provider prior to the commencement of any building works, especially if you are building an addition. It is a common misconception that your insurer will cover any damage to the existing structure, so knowing exactly what will and won’t be covered is key.
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