Why do I need Owner Builder Insurance?
As owner builder, you are the principal contractor, responsible for the management of the renovation or construction, of your home. You will have the satisfaction of successfully renovating or building your own home the way you like it. However, you will also face a unique set of risks and responsibilities and comprehensive insurance is an essential requirement.
Poor insurance advice could leave you nearly as exposed as if you had no insurance in the first place. This is why it is important to find an owner builder insurance professional who will help you choose the owner builder cover that best provides the protection you need during the construction process.
What insurance do I need?
If you’re an owner builder, the following insurance cover types should be considered:
Construction Works and Public Liability Insurance
This type of cover is designed to protect your construction and materials, as well as third party personal injury during the construction period. Your existing house structure can also be covered by this policy if you are doing an extension or renovation to your home.
The policy covers such things as fire damage, theft, vandalism, malicious damage, storm damage, wind and water damage and property damage. Most importantly, legal public liability insurance is generally packaged up with construction risk insurance and covers you for personal injury or property damage to third parties at the building site.
Not all policies will offer the same benefits. Important policy considerations include:
- The normal term of a policy is 12 months or until practical completion. Is this satisfactory or do you need an option to extend?
- Does the policy cover existing structures?
- Does the policy cover structure contents?
- Is the standard minimum of $5m for public liability cover satisfactory?
- Does the policy cover additional demolition and professional fees, if necessary?
Voluntary Workers Insurance
Accidents and sickness can happen to anyone, any time, any place; and construction sites still rate as one of the more dangerous places to work. Voluntary Workers Insurance (or Personal Accident & Sickness Insurance as it is also referred to), provides peace of mind in the unfortunate event of a covered accident or sickness, which could otherwise cause additional expenses and financial hardship.
All personal accident insurance policies differ and you should check the policy details to ensure that in the event of an accident, you have a policy that will cover you.
Workers Compensation Insurance
As an owner builder you must ensure that any tradespeople working on your site have their own Public Liability and Workers Compensation Insurance. You should also ensure where sub-contractors are undertaking work over $12K, in NSW, that they also carry their own Home Warranty Certificate.
Being in charge of the site, you might be liable if an accident occurs and the sub-contractors are not covered and a claim is made. Hence, the need to consider taking out some form of Workers Compensation Insurance for additional protection.
Home Owner Warranty Insurance
Should you decide to sell your new/renovated home within 6 years (in NSW) after completion of the work, you will need to take out Home Warranty Insurance where the market value of the entire project was valued at over $20,000. The new owner can only claim on this policy if you, the owner builder, has died, disappeared or becomes insolvent.
Home and Contents Insurance
You should also consider Home and Contents Insurance when reaching the final stages of the completion of your project, as at this point you will be receiving delivery of expensive whitegoods. New home construction sites are often the target of robberies.
When should I start the insurance?
You should aim to get your insurance in place before any work is started. If you don’t, it may be more difficult to obtain insurance for your project.
How long am I insured for?
The standard policy runs for 12 months, but if your construction takes longer, you can usually arrange an extension. Each insurer deals with this differently so enquire about this before you start the policy.
Where to start?
As a first step, you should seek advice from your existing insurance provider or an insurance broker who is licensed to provide professional advice in this area.
SHC Insurance Brokers is one of the leading insurance brokers in Australia. Having provided insurance services to Australians for over 20 years, we can boast a very experienced team, knowledgeable in all facets of insurance. We are one of Australia’s largest insurance brokers in providing insurance services to the construction industry and can provide a full range of owner builder insurance options to meet your particular needs.
At SHC, we take the time to explain the most relevant cover and features so a fully informed decision can always be made. Our tailored recommendations make sure that only the cover that’s needed is paid for — and the premiums will be the lowest possible.
You can contact us today for a free quote. Please speak to one of customer service consultants now on 1300 730 073, or if you prefer, you can do it all online at www.ownerbuilderensurance.com.au
Mitchell Larkin - SHC Insurance Brokers
