Is owner builder insurance mandatory in every Australian state?

No, the legal requirements for owner builder insurance vary between Australian states and territories based on project value and intended sale of the property. For instance, in Victoria, you must obtain domestic building insurance for projects exceeding $16,000 if you sell the property within six and a half years of completion, whereas requirements in other states may differ based on local building regulations.

Does owner builder insurance cover the existing house during a renovation?

No, a standard owner builder policy typically only covers the new construction works and materials being added to the property. If you are renovating, you must usually organise an 'existing structures' extension or notify your current home and contents insurer to ensure the original building remains protected while the works are being carried out.

Can I get owner builder insurance if I have already started construction?

Yes, you can often secure cover after construction has commenced, but you may face higher premiums or specific exclusions for damage that occurred before the policy was issued. Most Australian insurers prefer that you arrange insurance before any physical work or material deliveries occur to ensure full protection from day one.

Does owner builder insurance cover injuries to sub-contractors on site?

No, owner-builder insurance does not provide workers' compensation for sub-contractors. Independent tradespeople are expected to carry their own public liability and workers' compensation insurance. However, if a sub-contractor is a sole trader without their own cover, state regulators may deem them your worker, making you liable for injuries. If you are not deemed their employer, the public liability portion of your policy will still protect you if your direct negligence caused the injury.

What happens to my owner builder insurance if the project takes longer than 12 months?

Most owner builder insurance policies are valid for a standard term of 12 months and will expire if you do not request an extension. If your project is delayed, you must contact your insurer or broker to apply for an extension before the original expiry date, as cover cannot usually be backdated once it has lapsed.

Can I transfer my owner builder construction insurance to a new owner if I sell the property?

No, owner builder construction and public liability insurance policies are generally non-transferable and cease once the property is sold or the project is finished. However, owner builder warranty insurance (also known as indemnity insurance) is attached to the property itself and is designed specifically to protect the subsequent purchaser for the remainder of the statutory warranty period.

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There are three main types of owner builder insurance you need to consider: Owner Builder Construction Insurance, Public Liability Insurance and Builders Warranty Insurance.
It is possible to take out separate policies if you do not want cover for everything.

What is owner builder insurance?

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.

Who's classified as an owner 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.

How does owner builder insurance work in different states of Australia?

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-by-state insurance requirements

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 are 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 are 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 are 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 $20,000 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 premises. The minimum amount of cover is $5 million.	N/A

What insurance do I need to build, renovate or alter my home?

The insurance you need can depend on your state and who is doing the work. In NSW, licensed contractors must provide home building compensation cover for work over $20,000, but this cover isn't available for owner builders. Public liability insurance is recommended.

Workers compensation insurance

Workers compensation is compulsory if you directly employ workers or apprentices on your build. However, if you only engage independent, insured subcontractors, you generally won't need to take out your own policy.

Public liability

It's unlikely that you'll be required to have public liability insurance because it's your worksite. Some make public liability insurance compulsory for workers to be allowed on site. However, it might be included with your builders insurance policy. If not, then you should consider taking out cover.

How much does owner builder insurance cost?

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:

Type of building. The size and nature of your building will affect the costs of owner builder insurance. The materials used in construction also affect the price you pay.
Location. Where your building is located can affect your premium. The specific nature of your building site may also affect the insurance cost.
Quality of cover. You always get what you pay for. A really cheap insurance policy will often fail to cover you for everything you need when things go wrong.
Extent of construction. Building a completely new structure will cost more in insurance terms than a partial renovation.

Talk to a broker about owner builder insurance

FAQs

No, the legal requirements for owner builder insurance vary between Australian states and territories based on project value and intended sale of the property. For instance, in Victoria, you must obtain domestic building insurance for projects exceeding $16,000 if you sell the property within six and a half years of completion, whereas requirements in other states may differ based on local building regulations.
No, a standard owner builder policy typically only covers the new construction works and materials being added to the property. If you are renovating, you must usually organise an 'existing structures' extension or notify your current home and contents insurer to ensure the original building remains protected while the works are being carried out.
No, owner-builder insurance does not provide workers' compensation for sub-contractors. Independent tradespeople are expected to carry their own public liability and workers' compensation insurance. However, if a sub-contractor is a sole trader without their own cover, state regulators may deem them your worker, making you liable for injuries. If you are not deemed their employer, the public liability portion of your policy will still protect you if your direct negligence caused the injury.
No, owner builder construction and public liability insurance policies are generally non-transferable and cease once the property is sold or the project is finished. However, owner builder warranty insurance (also known as indemnity insurance) is attached to the property itself and is designed specifically to protect the subsequent purchaser for the remainder of the statutory warranty period.

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Written by

Gary Ross Hunter

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Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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Owner Builder Insurance

Owner builder insurance is for people who own and plan to be the main builder on the property. You can buy standalone cover or combine with other insurances.