A Builder’s Warranty insurance scheme is a legal requirement under State/Territory law, in all states except Tasmania, for builders carrying out domestic building contracts.

The intent of the scheme is to offer some consumer protections to homeowners to compensate for faulty workmanship or incomplete work, in the event that the builder dies, disappears or becomes insolvent and is unable to finish incomplete work.

If you are a licensed builder, you may need Builders Warranty Insurance to protect your clients, and it is YOUR OBLIGATION to arrange this insurance before undertaking applicable projects. If you own a home and are having work done to your home by a builder including renovations or an extension, you will need Builders Warranty Insurance for projects as follows:

• New South Wales ($20,000 or more)

• Western Australia ($20,000 or more)

• ACT ($12,000 or more)

• Victoria ($12,000 or more)

• South Australia Northern Territory ($12,000 or more)

• Queensland ($3,300 or more)

There are exemptions to the requirement for builders to obtain Builders Warranty in each State. In New South Wales, this may be due to the following:

• Residential Works that are under $20,000

• Obtaining an Owner-Builder Permit from NSW Fair Trading for certain projects

• As otherwise defined within the relevant Act or Regulations for example, ‘demolition work’.