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For your own protection, check that all the people you engage to do any part of your building project have the necessary insurances in place and that the certificates are current.

Home building compensation cover

The Home Building Compensation Scheme protects homeowners as a last resort if their builder cannot complete building work or fix defects because they have become insolvent, died, disappeared or had their licence suspended for failing to comply with a court or tribunal order to compensate a homeowner.

Information about the Home Building Compensation Scheme (previously known as Home Warranty Insurance) can be found on the State Insurance Regulatory Authority website at

Contract works insurance

This insurance should be obtained by the builder or tradesperson. It is for your protection and covers the loss or damage to materials and work.

If the builder or tradesperson does not have this type of insurance, you may risk:

  • inconvenience
  • time delays
  • disputes (and possible financial loss) if materials are damaged or stolen.

Professional indemnity insurance

This insurance covers occupations such as certifiers, architects, engineers and building consultants and covers claims arising from professional services provided for such matters as professional advice, design, certification, contract administration and project management.

Public liability insurance

This covers the builder or tradesperson if anyone is injured as a result of the building work. If the builder or tradesperson does not have this type of insurance, you could be liable because you own the property.

Workers compensation or SafeWork insurance

Make sure all employees are covered by their employer for workers compensation. This insurance covers employees who are injured on the building site.

If employers are not insured, you could be liable to pay the costs of any claim. In some circumstances, under the Workers Compensation Act 1987, these people can be regarded as your employees.

Important: A builder or tradesperson who does not operate under a trade or company name cannot usually take out insurance to cover themselves. It is advisable to take out your own minimum premium insurance just in case.

For more information about workers’ compensation insurance or names of companies who provide this type of insurance, contact SafeWork NSW.

Other insurance issues for home owners

If you’re renovating or extending an existing home:

  • notify your home insurance provider in writing before construction begins
  • find out if your home and contents insurance policy will cover damage or theft to your home during the period of construction; sometimes, if you don’t inform your insurance company before the work begins, you may not be covered at all
  • your lender (if borrowing money to fund the project) will want to see a current certificate of insurance to make sure you are protected
  • if the value of your home has increased as a result of renovations, you may wish to increase the value of your home/building insurance policy.

Important: Always check with your home insurer or insurance broker before you sign a contract.