Builders carry more insurance obligations than any other trade in Australian construction. It’s not just one policy — it’s a stack: public liability, home warranty insurance, builders all risk, workers compensation, and often professional indemnity. Each one has different triggers, different state rules, and different consequences if you get it wrong.
This guide walks through the full insurance stack for registered builders in 2026, with a focus on small to medium residential builders — the ones doing single homes, duplexes, townhouses, and small apartment blocks. If you’re doing high-rise commercial, your broker knows more than any article can cover.
The builder’s insurance stack
A registered builder in Australia typically needs these policies:
- Public liability — third-party property damage and injury. Non-negotiable licence condition in every state.
- Home warranty insurance — protects homeowners if the builder dies, disappears, or goes insolvent before completing the work. Mandatory for residential building work over a state-set threshold in every state.
- Builders all risk / contract works — covers the building under construction against fire, storm, theft, vandalism, and accidental damage. Often a contract requirement.
- Workers compensation — mandatory in every state if you employ anyone, including apprentices and casual labourers.
- Professional indemnity — if you do design work, provide advice, or certify compliance. NSW makes PI mandatory for registered building practitioners from July 2026.
- Tools and equipment — your plant, tools, and equipment on site. Optional but recommended for the value involved.
Let’s go through each one.
Public liability insurance for builders
Builders need higher PL limits than most trades. $5 million might work for a sole trader plumber, but it won’t get a builder onto a commercial site or satisfy most principal contractors. $10 million is the working minimum for registered builders. $20 million is standard for anything multi-unit or commercial.
Premium ranges for registered builders, small residential, $0-$500K turnover, 2026:
- $10M cover: $1,500-$4,000/yr
- $20M cover: $1,800-$4,800/yr
The wide range reflects the diversity of what “builder” means. A chippy with a building licence doing home extensions pays less than a builder doing three new homes simultaneously with five subcontractors on each site.
Special considerations for builder PL:
Subcontractor liability — builder PL covers the builder for the actions of their subcontractors, but insurers want to know your subbies have their own PL. If they don’t, expect a premium loading and possibly a higher excess for subcontractor-caused claims. Some insurers require you to collect certificates of currency from every subbie and keep them on file.
Completed operations — the long tail. A structural defect in a house you built five years ago could surface today. Builder PL policies typically cover completed operations, but check the retroactive date and make sure there’s no gap in your cover between when you built and when the claim arrives.
Contractual liability — many building contracts make you liable for things beyond common law liability. Read your contracts and check your PL covers the contractual liabilities you’re taking on.
Home warranty insurance
Home warranty insurance — also called home building compensation cover, home indemnity insurance, or builders warranty insurance depending on the state — exists to protect homeowners if the builder can’t complete the work or fix defects. The specifics vary state by state, but the principle is the same everywhere.
NSW — Home Building Compensation Fund (HBCF), administered by icare. Required for all residential building work valued over $20,000. Covers deposits lost, incomplete work, and defective work for up to 6 years for major defects and 2 years for minor defects. Builders must be approved by icare to get HBCF cover, which involves financial assessment of the builder’s solvency.
Victoria — Domestic Building Insurance (DBI), administered by the Victorian Managed Insurance Authority (VMIA). Required for domestic building work valued over $16,000. Covers incomplete work (up to 20% of contract price) and defective work for 6 years structural, 2 years non-structural.
Queensland — The Queensland Home Warranty Scheme, administered by the QBCC. Required for residential construction work valued over $3,300. The QBCC is unique in that it’s a government-underwritten scheme, not a private insurance arrangement. Builders pay a premium that goes into a pooled fund.
WA, SA, Tasmania — Similar schemes: WA Home Indemnity Insurance (QBE is the sole provider), SA Building Indemnity Insurance (mandatory for work over $12,000), Tasmania Home Warranty Insurance (threshold varies).
Home warranty insurance is a cost of doing business as a builder. Premiums are typically 0.3-1.0% of the contract value and are usually passed through to the client as a disbursement. You can’t avoid it if you’re doing residential building work above the state threshold.
Builders all risk / contract works insurance
Builders all risk (BAR) — also called contract works insurance — covers the building while it’s under construction. Fire, storm, theft of materials on site, vandalism, accidental damage during construction. It’s not a statutory requirement, but almost every building contract makes it the builder’s responsibility to insure the works.
BAR cover limits should match the estimated completed value of the project. For a single-home builder with one project on the go at a time, annual BAR cover might be $400K-$800K. Premiums typically run $800-$2,500/yr depending on the cover limit, construction type (timber frame costs more to insure than brick veneer), and site location (cyclone and flood zones cost more).
Some policies include:
- Transit cover — materials and equipment in transit to site
- Off-site storage — materials stored at your yard or supplier
- Removal of debris — the cost of clearing the site after a loss
- Professional fees — architects, engineers needed to redesign after a partial loss
Check whether your BAR policy includes flood cover. In many parts of Australia, flood is excluded or sub-limited. If you’re building in a flood-prone area, you need to know.
Workers compensation for builders
If you employ anyone — apprentices, labourers, site supervisors, admin staff — you need workers compensation. It’s mandatory in every state and territory. Sole trader builders who don’t employ anyone don’t need it for themselves (they need personal accident or income protection instead), but the moment you put on an apprentice, workers comp kicks in.
Workers comp premiums are based on your industry classification and total wages paid. For building construction, the industry rate typically sits around 3-6% of wages, depending on the state and your claims history. On $150,000 in wages, that’s $4,500-$9,000/yr in workers comp premiums.
Professional indemnity for builders
If you do any design work — even rough design for a home extension — or you provide advice, opinions, or compliance certifications, you have PI exposure. The NSW Design and Building Practitioners Act 2020, which requires PI for registered building practitioners from July 2026, is the most significant regulatory development.
PI for builders typically covers:
- Design errors (wrong beam spec, incorrect footing design)
- Advice that turns out to be wrong (telling a client they can build to a boundary line when they can’t)
- Certification and compliance declarations
Builder PI premiums for $1M-$2M cover typically run $1,000-$3,500/yr for small builders. The cost varies with your design exposure — a builder who outsources all design to an external architect pays less than one who does design-build.
Our professional indemnity guide covers PI for builders in detail.
Licensing and insurance by state
NSW — Builders must be licensed by NSW Fair Trading under the Home Building Act 1989. PL insurance is a licence condition for all building licence classes. HBCF is required for residential work over $20,000. From July 2026, PI for registered design and building practitioners under the Design and Building Practitioners Act.
Victoria — Builders must be registered with the VBA as a building practitioner under the Building Act 1993. PL insurance is required. DBI is required for domestic work over $16,000. Commercial builders need different cover.
Queensland — Builders must be licensed by the QBCC. PL is a licence condition. The QBCC also sets minimum financial requirements (net tangible assets) that builders must maintain — this goes beyond insurance and is unique to Queensland.
WA, SA, Tasmania, ACT, NT — Each has its own builder registration scheme with PL as a condition and home warranty insurance required for residential work above state-set thresholds.
BizPack vs standalone for builders
Builders often need cover levels and policy features that basic BizPack products don’t offer. A tradie BizPack designed for a sole trader painter isn’t going to cover a registered builder running multiple sites with subbies.
That said, some insurers offer Builder’s Packs that bundle PL, BAR, and tools into a single annual policy. The advantage is that the cover is designed for builders from the ground up — rather than adapting a tradie pack — so the limits and conditions are appropriate.
If you’re a small builder doing one or two homes a year, a Builder’s Pack from a specialist construction insurer might be the right fit. If you’re doing volume work, a broker who understands construction insurance will likely serve you better than an online comparison platform.
For smaller builders and trade-level building work, you can compare quotes through BizCover — get a quote.
For more on PL specifics, read our public liability guide and the state-by-state requirements.
Frequently asked questions
Can I get home warranty insurance if I’ve had an insolvency in the past?
It depends on the state and the circumstances. In NSW, icare assesses builders for HBCF eligibility and past insolvencies are a red flag but not an automatic decline. In Victoria, the VMIA assesses each builder individually. A past insolvency will make it harder and more expensive, but it’s not impossible.
Does builder PL cover defects I didn’t cause — like faulty materials from the supplier?
Your PL covers damage resulting from defective materials, but not the cost of the materials themselves. If defective roof trusses from your supplier cause a roof collapse, your PL covers the resulting damage to the rest of the house. The cost of the trusses and their replacement is between you and the supplier. The supplier’s product liability should respond to their defective product.
I’m an owner-builder. Do I need the same insurance?
Owner-builders are generally exempt from home warranty insurance requirements because they’re building for themselves. PL is still advisable — if your building work damages a neighbour’s property, you’re liable. Workers comp still applies if you employ anyone. And if you sell the property within a statutory period after completion (typically 6-7 years depending on the state), you may need home warranty insurance retrospectively.
What’s the difference between claim-made and occurrence-based PL?
Most builder PL policies in Australia are occurrence-based — they cover incidents that happened during the policy period, regardless of when the claim is made. Claims-made policies only cover claims made during the policy period. For builders, occurrence-based cover is critical because defects can surface years after the work was done. Never accept a claims-made PL policy for building work unless you fully understand the implications and have run-off cover arranged.
How do I manage insurance across multiple sites with different start and end dates?
Most builders carry an annual PL policy that covers all their sites automatically. BAR is typically project-specific — you take out a BAR policy for each project or have an annual BAR policy that you adjust as projects start and finish. Talk to your broker about an annual BAR facility that lets you declare projects on and off as they progress.
The information in this guide is general in nature and does not take into account your individual circumstances. Builder insurance requirements vary significantly by state and project type. Premiums depend on your licence class, turnover, project types, claims history, and location. Consult a licensed insurance broker for advice specific to your building business. Read the Product Disclosure Statement (PDS) before purchasing any insurance product.