The 10-step framework

1. STEP 1

   Understand the four insurance types

   Home Indemnity Insurance (HII): protects client if builder becomes insolvent, dies or disappears. Contract Works Insurance: covers damage to the build during construction. Public Liability Insurance: covers third-party injury or property damage during construction. Home and Contents Insurance: covers your finished home and belongings post-completion. All four are needed at different stages.

2. STEP 2

   Home Indemnity Insurance is mandatory

   Under the Building Work Contractors Act 1995 (SA), any residential building work over a threshold value requires the builder to hold Home Indemnity Insurance for the client benefit. HII is typically underwritten by QBE Insurance or similar. The builder pays the premium; the client is the beneficiary.

3. STEP 3

   Verify HII before signing the contract

   Ask the builder for a certificate of currency for HII specific to your project. The certificate names you as beneficiary. Do not sign the contract until you have seen this certificate. HII cannot be added retrospectively if the builder gets it wrong.

4. STEP 4

   Understand what HII actually covers

   HII covers loss due to builder insolvency, death or disappearance. It does not cover: workmanship disputes, contract variations, cost overruns, timing delays, or design errors. For those matters, other insurance types or dispute resolution processes apply.

5. STEP 5

   Contract Works Insurance is the builder responsibility

   Contract works insurance covers damage to the physical build during construction (fire, storm, theft, vandalism). It is typically the builder responsibility but you may be able to negotiate the policy limit and specific coverages. Get the certificate of currency at contract stage.

6. STEP 6

   Public liability is essential

   The builder should hold Public Liability Insurance covering at least $10 million (typical Australian residential level). This covers third-party injury or property damage caused by the build. Confirm the policy sum insured on the certificate of currency; some smaller builders carry inadequate cover.

7. STEP 7

   Update your Home and Contents at handover

   The day you take handover, your existing Home and Contents insurance (if any) must be updated to the new address, new sum insured, and new coverage. Failing to do this leaves the completed home uninsured. Talk to your insurer 2 to 4 weeks before handover.

8. STEP 8

   Get a QS insurance replacement estimate

   The correct Home and Contents sum insured is the cost to rebuild, not the market value of the property. A quantity surveyor can produce an insurance replacement estimate for a modest fee. Every 3 to 5 years is a reasonable review cycle.

9. STEP 9

   Check for exclusions

   All insurance policies have exclusions. Common exclusions: bushfire in high-risk areas without additional premium, flood in flood-prone zones, subsidence, cyclone in northern Australia, war and terrorism. Read the Product Disclosure Statement carefully for your specific policy.

10. STEP 10

    Consider Landlord Insurance if you rent out

    For investment properties, standard Home and Contents does not cover tenant-caused damage or rent loss. Landlord Insurance is a distinct product. Confirm before your first tenancy that appropriate cover is in place.

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