Builders risk insurance helps pay for potential issues during building projects such as fire, weather damage, theft, and storms. The policy covers various parties involved in the project including builders, designers, engineers, lenders, and buyers.
In NSW, licensed builders need home building compensation for each home project over $20,000 to protect homeowners if builders can’t finish work or fix defects.
Most states require residential builders to have home building compensation to protect homeowners if defects aren’t fixed.
Self-employed builders need various insurance policies including builders’ risk, public liability, professional indemnity, contract works, tools, equipment, and vehicle insurance.
Coverage and Protection
- Builder’s Risk Insurance: Protects against physical damage during construction, covering fire, weather, theft, and other issues. It differs from homeowner’s insurance as it covers ongoing construction.
- Public Liability: Covers injury to the public or damage to customers’ property, providing a safety net against unforeseen problems.
- Professional Liability: Protects against construction mistakes and omissions, covering outside parties like architects and engineers.
Comparison and Considerations
When looking for insurance coverage, compare rates from multiple companies and decide on the limits and extensions needed based on the unique risks of the project.
Additional Insights
- Manufacturer’s hazard protection covers property damage, disasters, and theft, but typically excludes faulty materials and workmanship.
- Design and construct insurance is necessary to cover gaps in professional indemnity regarding manual work and construction, addressing faulty advice, design breaches, and legislation breaches.