SA Regulatory Guide

What Is HBCF Building Indemnity Insurance In South Australia?

The compulsory SA scheme that protects homeowners when a builder fails - what it covers, what it doesn't, and how to verify a builder is actually insured.

Shortlist an HBCF-insured Adelaide builder 1300 885 919

By George Giannakakis · B.Arch.Studies · M.Arch (UniSA) · RLA300580

Last reviewed: 28 February 2026 · How we research

What HBCF covers

Non-completion (builder goes bust mid-build - HBCF finishes the work), major defects (structural issues discovered within 5 years post-handover), and non-compliance with the contract when the builder is unable to remedy it. Cover limits are $150,000 per dwelling for non-completion and $80,000 for defects.

What HBCF does NOT cover

Cosmetic defects (paint, minor tile chips), damage caused by owner-supplied materials or trades, delays or variations you agreed to, disputes about workmanship where the builder is still trading and disputing your claim, and any work you contracted directly with subbies outside the head contract.

How to verify HBCF cover before you sign

Ask the builder for their HBCF certificate for your specific project - it is issued per project, not per builder. Cross-check the ABN on the cert against the ABN on the contract. Confirm the sum insured covers your contract value. If the certificate is missing, expired, or lists a different address, do not pay a deposit.

What happens when a builder goes bust

Lodge a claim with HBCF within 90 days of learning about the builder's insolvency or disappearance. HBCF appoints a completion builder to finish the work up to the sum insured. You may still be out of pocket on variations, upgrades or costs above the sum insured - which is why keeping the contract value tight and paid-to-date reasonable is the second line of protection.

Frequently asked

Is HBCF Building Indemnity Insurance mandatory in South Australia?

Yes. Any residential building work over $12,000 in SA legally must have Building Indemnity Insurance under the Building Work Contractors Act 1995. The builder must hold the cert before starting work. Building without it is an offence and voids the homeowner's statutory protection.

Does HBCF cover a renovation or extension in Adelaide?

Yes. Any residential building work over $12,000 - new build, KDR, extension, major renovation, granny flat - requires Building Indemnity Insurance. Ask for the cert regardless of project type. Owner-builder work is separately regulated and does NOT require HBCF cover.

How much does HBCF Building Indemnity Insurance cost?

The premium is typically 0.7% to 1.3% of the contract price, charged by the builder and passed through in the contract as a cost line. On a $500k build, that's $3,500-$6,500. It is a legal cost, not a variation - do not pay a builder who tries to charge it separately or bill it as a "compliance surcharge".

How long does HBCF cover last?

Cover runs for 5 years from the date of practical completion for structural defects, and 2 years for non-structural defects. Non-completion cover applies during the build. Keep the cert, the contract and the practical-completion certificate together - you will need them if you ever claim.