What Insurance Policies do I need to see from my Builder? (before signing the contract!)
Wondering what insurance policies you should be seeing from your Builder before works begin? 🤔
Each contract specifies that types of insurance your Builder must have in place.
I’ve pulled together the Policies required under the Master Builders VIC Home Improvement Contract.
The 3 insurance policies you should sight from your Builder before works begin:
If your wondering what insurance policies your Builder should be providing under your contract, this is one of the things I discuss in my Building Contract review service!
The Master Builders VIC Home Improvement Contract specifies 3 insurance policies you should sight from your Builder.
Domestic Building Insurance (DBI) (Clause 5)
DBI provides cover for incomplete or defective building works for for projects over $16,000. DBI insurance provides cover to fix structural defects for six years, and non-structural defects for two years beyond completion of the project.
Your Builder must share their DBI Policy & Certificate prior to execution of the Building contract.
Contract Works Insurance (CWI) (Clause 6.2)
CWI is to cover loss or damage to building works during construction. CWI finishes at the end of the project, unlike DBI. The cover amount for CWI is the contract value + 15%.
Ask for a certificate of Contract Works insurance before any construction works begin.
Public Liability Insurance (PI) (Clause 6.3)
PI provides cover in case of personal injuries or death on the construction site. The cover amount should be not less than $5m for any one claim.
Ask for a certificate of Public Liability insurance before any construction works begin.
What can happen if I don’t see the Builders insurance certificates?
Under the contract terms, your builder must have all three insurance policies in place. It’s best that you sight them all, because if anything were to go wrong during the build you don’t want to find out adequate protections aren’t in place.
Tip: Always ask to see the Certificate of Insurance
Your Builder sharing with you their policy is a good start, but it’s important to also ask for a certificate of insurance as this will contain the details you need if a claim needed to be made.
When you receive the Certificate, make a note of the expiry date and request a new certificate when the date of cover lapses.
Knowing what to do before signing your Building Contract doesn’t need to be a challenge
I always encourage my Home Building Clients to take a proactive approach to Building Insurance by asking their builder for the Certificates of Insurance as a priority after signing the contract.
Leaving insurance totally in the ball court of the Builder is ok, but It’s much better to be ensure the right protections are in place so you have peace of mind throughout your build!
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Written by Annelyse, Building Contract Enthusiast, Project Manager, and founder of Build Together Project Management.
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