Owner builder insurance is a type of insurance designed specifically for individuals who are building or renovating their own property without hiring a licensed builder.
Insurance can be good to have because you face the same risks and need for insurance as a registered builder.
An owner builder is someone who takes on the responsibility of managing and overseeing a construction or renovation project on their own property. Owner builders can be individuals who own the land on which the construction or reno is taking place, property investors who plan to work on and then sell the property, and sometimes developers too.
Each Australian state and territory has its own legislation on exactly who constitutes an owner builder, so it’s important to familiarise yourself with the relevant legislation where you live for full details. But as a general rule, an owner builder is someone who constructs or renovates a residential building on their own land, and who is not otherwise employed as a builder.
Owner builders basically act as the general contractor for their building project, hiring out work to subcontractors across a range of trades. They’re also responsible for the building schedule and assume any liability associated with the project, which means they assume all the responsibilities (and associated risks) that a registered builder would normally take on.
| State | Insurance requirements during building | Your insurance requirements when selling the property |
|---|---|---|
| NSW | Builders, contractors or tradespersons must have home building compensation (HBC) cover for jobs costing more than $20,000. This covers incomplete work. | If you selling a house within 7 years and 6 months: You must include a 'consumer warning' in the sale. |
| Victoria | Builders, contractors or tradespersons must have domestic building insurance for jobs costing more than $16,000. This covers incomplete work. | If you selling a house within 6 years and 6 months: then an owner builder must have domestic building insurance that covers for issues with the building. |
| Western Australia | Builders, contractors or tradespersons must have home indemnity insurance for jobs costing more than $20,000. This covers incomplete work. | If you selling a house within 7 years: then an owner builder must have home indemnity insurance that covers the purchaser for issues with the building. |
| South Australia | Any building work contractors must take out building indemnity insurance for work costing $12,000 or more to cover completion of work e.g. this covers incomplete work. | Claims can be made up to 5 years from the date building work is completed. So it's a good idea to ensure there is building indemnity insurance if selling within 5 years of the building work being completed. |
| Tasmania | To get an owner builder permit you're required to have liability insurance for personal and property damage on the site and construction liability cover for damage to the property where the owner builder has legal control of the premise the premise. The minimum amount of cover is $5 million. | N/A |
You typically need to take out some form of builders insurance if the renovation or construction costs more than a specific amount – for example, $20,000 in NSW.
Workers compensation insurance
This is likely to be the only compulsory form of insurance you'll need. For example, you probably won't need workers compensation insurance since it's likely you're only engaging with contractors.
Public liability
It's unlikely that you'll be required to have public liabilty insurance because it's your worksite. Some make public liability insurance compulsory for workers to be allowed on site. However, it's might be included with your builders insurance policy. If not, then you should consider taking out cover.
The cost of owner builder insurance is not fixed and needs to be calculated on an individual basis. However, there are certain factors considered by insurers when determining an appropriate premium. These factors include:
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