It's a great time to be an owner builder, and the chief advantage that we see is that you can build your house your way.

Training Providers

There are many specialist companies offering training courses - in most states training is compulsory (and excellent value for money). Each training course will provide you with valuable knowledge you wouldn't otherwise have. Some of these providers (in alphabetical order) are: ABE Education, Absolute Education, Anvill (straw bale), the Owner Builder Centre, Safe Rite, and many others to boot.

Read and Talk to Others

There are online forums and discussion groups, Home One is one of the oldest and most active. Even non-owner-builder-specific forums have other people ready to discuss their projects. Talk to people face-to-face as well, Home Base Perth for example is a good place to see products and talk to domain experts.

And for domain expertise, you absolutely can't go past The Owner Builder magazine (since 1981!) for an enormous wealth of articles and ideas.

Don't forget your building certifier & surveyor. Chances are that he or she has been through the owner building process many times over, and would be happy to pass on some of that hard earned wisdom.

Google Search it, too

Whilst you probably won't find concentrated information like the domain experts we mentioned, there are snippets of useful information available all over the web.

For example, these quick links are easily searchable and provide some background information on the rights and responsibilities of owner builders.

And lastly, the answers to every question we've ever been asked about owner builder insurance are discussed in the insights on our website. Owner builder insurance doesn't have to be complicated; we try to make the process of obtaining and understanding an owner builder construction insurance quote easy.

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Regularly we are asked about how an owner builder can take over a commenced project - whether because the original builder was contracted only until lock up or because the builder has been fired from a job.

The answer in each case is the same - the owner builder should insure the works from the moment the old builder ceases responsibility for the work.

Existing structures

Existing structures are all buildings on the site that exist prior to starting a new owner builder insurance policy. So if you're in that position of taking over a commenced project, it's vitally important that you insure the partially completed works as Existing Structures, and not as a regular Contract Value.

Don't get caught out

If you don't take our advice, and try to insure the partially completed work in the Contract Value, you will find that you're not actually insured for what you intended.

All insurers treat the Contract Value as the value of works being completed during the insured period. Since the partially completed works ("lock up" or otherwise) were completed before the new insurance policy commenced, your insurer would be well within rights to deny a claim for damage to the old works.

You might get lucky, and they agree to cover the old works, but you might not. Why take a chance?

Get the right advice

Here at Allrisk we've been advising owner builders for over 10 years, and we've seen just about every mistake misinformed owner builders can make. Insuring your owner builder project correctly is usually cheaper than doing it incorrectly, and will save you a massive headache if something later goes wrong.

Insurance really is common sense, and it doesn't have to be difficult or costly to obtain. Our online quote form takes around 90 seconds to complete, and we'll instantly provide you with all of the information you require on e-mail. Answers to any question you might ask are in the quote documents, but if you get stuck we're always happy to help you out on the phone. 1300 255 747

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By far, the most common topic we discuss is workers compensation insurance for owner builders.

Why? Why do we harp on and on about it when some of our competitors try to claim that it is completely unnecessary for owner builders?

It's certainly not because we enjoy talking about the topic. It's complicated (I'm sorry - it is) and it takes a lot of time to explain properly.

The major reason is that whether you want to believe this or not, owner builders may be considered to be the employer of workers within the terms of your state's workers compensation act. Not employees, but workers. There is a difference.

We're not trying to "upsell" you - if you don't want the insurance, then please don't take it. But listen to our advice about the risks you face (and double check with your state's regulator - but just get that advice in writing).

What's a worker?

Every state is slightly different, but a worker is a natural person (not a Pty Ltd company) who is paid in return for regular personal exertion for someone. There are exceptions and complication of course, but as broad rule, that's about right.

If a worker is injured on the job, that worker has statutory rights to claim for medical expenses, rehabilitation, and resulting loss of income. You can't take that away from someone (no matter whether you think you should be able) - if a (within the act) worker is injured, it's the worker's choice as to whether to lodge a workers compensation claim or not.

So what's an employer?

An employer is someone who engages workers. Owner builders don't have ABNs, they aren't "businesses" as such, but if an owner builder engages workers on the owner builder's construction site, it's highly likely the owner builder would be deemed to be the employer for the purposes of the workers's compensation act.

If you don't agree, please double-check with WorkCover (iCare in NSW) in your state. But get that advice in writing - people regularly tell us that they get different answers on different days of the week.

Am I a worker?

No. You (the owner builder) are the employer, you're not the worker. The sole trader contractors you've engaged may be considered to be your workers, not you yourself.

Is my tradesman a worker?

If the tradesman is a sole trader - then yes, maybe. The same rule applies as in the last paragraph - the sole trader is not a worker with respect to his own business - just like you. With respect to his own occupation, he's the employer, not the worker.

But when it comes to respect to your occupation, he might be your worker.

Wow that's non-intuitive

I'm sorry; I wish it were easier. But it does make sense when you consider what workers' compensation insurance is trying to achieve - that all workers be protected against injury on the job. The acts are written specifically about "natural persons" and "deemed workers" for a reason - to stop unscrupulous businesses from leaving their workers unprotected.

So does public liability cover workers compensation

NO. IT. DOES. NOT.

It's frustrating that some of our competitors claim that public liability covers workers' compensation risks. It doesn't. It can't. It's bordering on malicious to claim that it does. If public liability could cover workers' compensation insurance, it'd be called "workers compensation insurance", not "public liability insurance".

What public liability insurance does do, is pick up legal liability that is not workers compensation - e.g. a lawsuit for personal injury by a non-deemed worker.

I like what the other blokes saidBut it's not right. Read the other blokes' policy wording - there will be a firm exclusion to say "this does not cover workers compensation liabilities". All public liability insurances say that (even the one that comes with your car insurance!) - what do you suppose it means when someone tells you that when the policy wording says the opposite?

Get the facts

Please talk to WorkCover in your state (they're called iCare NSW in NSW). Explain to them that you're a builder engaging sole trader contractors (though of course you won't know exactly how many at such an early stage) to work on your project site. If they tell you that you don't need workers compensation - then that's great. Just get that in writing (so the regulator can't later deny that advice), and feel confident that you've protected yourself.

Just please protect yourself - make sure you're not going to get into trouble by not having the appropriate insurance.

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Getting hurt isn't cheap - if you or one of your workers is hurt on the project, medical attention at the hospital and most importantly rehabilitation afterwards can be expensive and long.

Make sure you consider health and wellbeing (for yourself as well as your workers) when working on your project.

Medicare

The first (and sometimes only) port of call is Medicare.

Not many people realise this, but the Health Insurance Act of 1973 prohibits insurers from offering medical expenses coverage in Australia except under limited circumstances. Accordingly, you'll only see medical expenses insurance under Health Insurance, and Workers Compensation. You'll never see it anywhere else - it's simply against the law.

Health Insurance

We recommend that all owner builders investigate health insurance to cover medical costs.

What about rehabilitation & loss of income while you're recovering from the injury?

Income Protection, Life, and TPD

You should also look at income protection insurance to cover your loss of income while recuperating. You may find that your superannuation fund offers income protection insurance as an add on (and it's usually quite cost effective!). Just make sure you have the appropriate cover here - life, TPD, income protection, and trauma insurance are all very different. Your life insurance advisor should help you here.

Public Liability and Workers Compensation

Commonly people assume that public liability covers owner builders for injury. That's unfortunately incorrect; public liability covers the owner builder's responsibility to pay compensation to other people (hence the word "public") for personal injury caused by the owner builder project. Since you can't actually sue yourself, the consequences of self-injury on the site need to be insured by health or income insurance.

Workers Compensation has the same problem - workers compensation is to cover statutory responsibilities towards deemed workers of the owner builder, not the owner builder itself. Since you as the owner builder are the "boss" and not the "worker", workers compensation doesn't cover the owner builder, only the workers of the owner builder.

Volunteers Cover

Volunteers are people helping you out on your project with manual labour, under your direction, for free, and without expectation of reward. We offer Volunteers Cover to insure the loss of income of volunteers (including the owner builder and spouse) following an injury on the project. Volunteers Cover cannot cover those medical expenses prohibited by the Health Insurance Act 1973; in general, it can only cover the loss of income and non-medical additional expenses.

Consider your options

When weighing up the costs of being an owner builder, please consider what could go wrong, and how you can best offset that risk with insurance. When we provide quotes we break our prices down into individual sections so you can see exactly what you're paying for, and only buy insurance against the required risks.

Quotes take around 90 seconds and are instantly e-mailed to you, together with a copy of the policy wording and an explanation of what is insured.

Of course if you get stuck, please send an e-mail or give us a call 1300 255 747.

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One of the more perplexing things Owner Builders sometimes say to us is: I don't need insurance for FIRE since my house is made of metal. Fire doesn't burn metal/concrete/masonry/moon rocks/string cheese/whatever else is the building material du jour.

Yes, that's true to a point ... but what do you think happens to your metal or concrete if there is a fire?

Metal warps. Concrete becomes brittle. If there is a significant fire, even the concrete pad will become sufficiently damaged that no engineer would let you build on it again.

So whilst your metal building / concrete pad won't burn per se, it will likely be sufficiently damaged that you'll need to cart away the debris and start again from scratch.

Water can't hurt me either

By far and large, the most expensive type of claim we see is for storm or water damage. Water gets in everywhere and can wreck just about any building site. The worst thing is that it always seems to happen at the worst possible time (while the roof is off) or with high winds blowing away the sarking.

And let's not talk about high volumes of water - we've had a couple of claims where water has poured in from a hose or a broken pipe, absolutely destroying someone's home.

Escalation, Professional Fees, Expediting, Storage, Transit

re all standard features of our Owner Builder Construction insurance - and yes you need these even if you think you don't!

When things go wrong on a construction site, they seem to go expensively wrong. Make sure you have good construction insurance so you're not going to be significantly out of pocket following a catastrophe.

Best of breed

Our owner builder insurance is a best of breed policy covering the major risks any owner builder might face. Make sure you protect yourself and get a quote from us - you'll be surprised at how inexpensive insurance can be for your project.

Quotes take around 90 seconds to complete and are e-mailed to you instantly with all of the terms and conditions and an explanation of what's insured.

Make sure you insure your project for fire - it's just not worth missing out on being properly insured.

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It sounds obvious, but not all builders are the same; most are highly skilled, experienced, and competent, and some are ... not.

Sadly, in insurance we hear horror stories more often than not; usually when it's too late to do anything about the choice of builder.

Ask questions

Are you a licensed builder?

Quite a few "builders" are actually carpenters and other trades, and whilst they may have loads of experience in the particular trade, are less experienced in budgetting and time management skills.

For how long have you had your licence?

Do you have any completed projects we can view?

Any client references?

Don't be embarrassed to ask, you'd think that a good builder would be proud of his past work and his past clients would give him a good review.

What other work do you have on the go?

Realistically, most builders will be working on more than one job at any one time. On one hand that could be a good thing (the builder is in demand!) but if the other job takes up too much time then your project could be left languishing.

Check insurances

Do you have insurance? Home warranty? Public liability? Workers compensation?

Whilst it's tempting to think that an answer of "I'm fully insured" is sufficient, each type of insurance is different from the others, and is required by your builder.

Home Warranty covers the risk of the builder going bankrupt (or disappearing) and leaving the project unfinished, or if faults are discovered in the work.

Public Liability covers the risk of injury or damage to others; it insures the builder for any compensation payable to the injured party.

Workers Compensation covers statutory responsibilities to deemed workers (usually sole trader contractors) or employees of the builder.

NB: These insurances are all readily available to builders, and you as the owner builder absolutely cannot buy them on the builder's behalf. If your builder says that he can't buy them himself, warning bells should start ringing very very loudly.

Talk realistically

This tip might sound odd, but we'd encourage you to just talk to your builder as a building professional. Ask if he has any advice or tips for you, or if he has any concerns about the project, your timelines, or budget.

Professionals are usually keen to share their wisdom, and usually like nothing more than engaging with serious and involved owners.

Get your own insurance

Even though your builder will have his own insurance, you absolutely need your own insurance as well. The builder's insurance covers the builder, it doesn't cover you, or your own responsibility towards your own project.

We specialise in owner builder insurance, and try to make the entire insurance process very simple to manage. Online quotes take 90 seconds to complete, and cover can be placed instantly, 24 hours a day. We also offer a price guarantee - if you find a lower comparable price, we'll beat it by $50 (it doesn't happen very often though!).

Make sure you pick the right builder and the right project insurance for your build.

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Home Warranty insurance is a statutory insurance covering the risk of the builder going bankrupt (or dying, disappearing, or refusing to comply with a court order) AND either leaving a project incomplete or failing to fix defects in the home.

That's it. If there's a defect in the construction of your home, your first port of call is the builder; and only if the builder has disappeared or refuses to pay, can you call upon the statutory insurance.

Same for Owner Builders

It's the exact same situation for owner builders - if there's a defect in the home, you'll be expected to fix the defect, at least within the statutory warranty period (which varies by State and Territory of Australia).

When you think about it, having owner builders insure against the risk of bankruptcy is a pretty long bow to draw - it's exceedingly rare for an owner builder to be bankrupt, and so the insurance wouldn't often be used.

Only required in VIC and WA

Accordingly, most states and territories of Australia have removed the insurance requirement for owner builders (in NSW effective January 2015), and we can only hope that the requirement will be relaxed in the remaining two states at some point too.

Whether or not you have a legal requirement to hold the insurance, the basic point remains that the insurance only applies when the owner-builder dies, disappears, becomes bankrupt, or refuses to comply with a court judgment. Outside of those circumstances, separate "home warranty" insurance doesn't provide any protection to owner builders.

I'm in VIC or WA, how do I get a quote?

In VIC, the VMIA released a notice of the providers here:

https://www.dbi.vmia.vic.gov.au/latest-news" target="_blank" rel="nofollow">https://www.dbi.vmia.vic.gov.au/latest-news node name/announcement-2

In WA, we can provide indications from QBE Insurance here:

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We know that it can be challenging to compare insurance products on anything other than price. People are naturally very poor at assessing risk, and especially so at differentiating the important factors from the fluff. Comparing insurance products is more like comparing oranges with grapefruit - they're basically the same looking, the same shape, they're both citrus fruit, and you could easily mistake one for the other. But one is naturally sweet, and the other is sour.

Luckily, with owner builder construction insurance there's negligible difference between each insurer's core policy. They all cover damage to the project during the construction period and cover your legal liability to pay compensation for injury or damage to others, caused by the construction project.

The difference is usually in the things you wouldn't think to ask:

How long can this insurance last?

What happens if I exceed the maximum time length?

Does the advice given match what the policy wording says?

How experienced is the underwriter with construction insurance?

How long can this insurance last?

Whilst everyone hopes to finish their project on time and under budget, reality is that all it takes is for a couple of tradies to fall behind, or someone getting sick, or running out of money, and the 12 month project can stretch on and on.

TIP: You need to make sure that your insurance can extend for up to three years; of course hope that you'll never need it.

What happens if I exceed the time length?

Some insurers offer at most a 12 month policy period, some offer 24 months. Here at Allrisk we regularly get calls from people needing just a few more months cover than they've been given by another insurer. Although we always help, it can be frustrating for the owner builder to have to change insurers during the final project stage.

For our own clients, we have a maximum period of 36 months. And when people need to extend beyond the 36 months, we always try to help find one final extension (and usually have good success).

TIP: Ask what happens if you exceed the time period - will you be left to fend for yourself, or will your insurance company try to help?

Does the advice given match what the policy wording says?

This one might sound a little odd, but we're regularly told that another owner builder insurance provider has told an owner builder that he doesn't need workers compensation because the other provider's policy covers the risk. That's not only misleading, but it's also patently false - all public liability insurances (including owner builder contract works, home & contents, motor vehicle, and other business liability insurances) contain a firm "workers compensation" exclusion. They actually have to say that to conform with the law.

TIP: If it sounds too good to be true, it probably is. Check for yourself, ask where in the policy wording the claim is substantiated. It shouldn't be hard, policy wordings are written in plain English. If the wording doesn't say what you're told it says, you might have problems.

How experienced is the underwriter with construction insurance?

Not all insurers deal in construction risk - in fact the vast majority of insurers you see advertised only deal in home & contents and car insurance, their staff aren't equipped to deal in construction's unique challenges.

TIP: Ask about the size of the underwriter, and for how long that underwriter has been dealing in construction insurance.

Allrisk credentials

We can cover owner builders for up to 36 months.

If more time is needed, we'll try to extend your policy one final time (not guaranteed, but we have high success rates).

Our policy wordings are available for free download, and we send them to you with each quote.

Vero Insurance is part of the Suncorp / GIO / Resilium / AAI group - they're presently the second largest insurer in Australia, and are one of the major construction insurers in Australia.

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Recently a couple of owner builders confessed that they've been drowning in the sheer number of acronyms and abbreviations in their owner builder licence paperwork and that we (Allrisk) were the only ones able to explain what these acronyms mean. That's a dubious honour at best, so let's try to go through some of the more common shorthand for posterity:

APZ

ALL: These are Asset Protection Zones - land buffers between higher bushfire risk areas and humans or other valuable assets.

BASIX

NSW: This is the Building Sustainability Index - a web-based tool to assess the proposed development against factors like water consumption and greenhouse gas emissions.

BCA

ALL: This is the Building Code of Australia.

CDC

NSW(mostly): This is a Complying Development Certificate - a fast track approval system for low impact development on certain criteria.

CoO

ALL: This is a Certificate of Occupancy, your council's document confirming that they've inspected your owner-built home and believe it to be suitable. It's just a piece of paper, if you've finished the project but will have to wait weeks for the council to be able to inspect, we'd urge you to get immediate home insurance to protect the building (as once you've finished building, owner builder construction insurance may not be valid).

DBI

VIC: This is Domestic Building Insurance - covering the risk of the owner builder going bankrupt/dying/disappearing and leaving the purchase of the owner-built home with shoddy work or defects. This can only be purchased through approved agents - more info here.

HBCF

NSW: This is the Home Building Compensation Fund - it covers the risk of the builder/tradesman going bankrupt/dying/disappearing and leaving the owner builder with shoddy work or materials. Owner builders themselves do not buy this insurance (the owner builder him/herself isn't going to claim on him/herself for his/her own bankruptcy).

HWI

WA: This is Home Warranty Insurance - covering the risk of the owner builder going bankrupt/dying/disappearing/failing to comply with a tribunal order and leaving the purchaser of the owner-built home with shoddy work or defects. QBE is the sole insurers left in WA, we can provide indications here.

iCARE

NSW: This is Insurance & Care NSW, the government body administering the Home Building Compensation Fund and NSW Workers' Compensation. Don't get their functions confused - one is not a substitute for the other; whilst owner builders won't need the HBCF directly (though contractors do), they may need workers' compensation for sole trader contractors working for the owner builder.

LSL

NSW: This is the Long Service Levy payable to your council in respect of long service payments to construction industry workers. Owner builders may be able to apply for a reduction in the levy proportional to the amount of their own labour in the work.

PCA

NSW (mostly): This is a Principal Certifying Authority - the body issuing permits and inspecting work during the build to ensure compliance with some legal requirements. It may be your council directly or maybe a building certifier reporting to the council on your behalf.

And there are many more!

Being an owner builder can be very rewarding, but with the volume of requirements and paperwork, it can feel daunting. At least the insurance part isn't difficult - we provide instant online quotes (also immediately e-mailed to you) along with a description of the options which can be insured, together with the relevant insurance policy documents.

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If something goes wrong, our best advice is just to ask yourself what you yourself would do if you weren't insured. If it's common sense and reasonable, you can be pretty sure that that's what your insurer would ask you to do anyway.

Step 1 - Don't Panic!

Don't panic, make sure there's no immediate danger to you or to anyone else, and make a note of what's wrong.

Step 2 - Grab your camera and take some photographs

Photographs of the damage or the injury site will help explain exactly what's gone wrong. Take some photographs of the damage and the surrounding area so it's plain exactly what has happened.

Step 3 - Make it safe

If the project site could cause further damage or is a hazard to others, remove the dangerous parts and cordon it off. The last thing you'd want is for something else to go wrong and make a disaster even worse.

Step 4 - Let us know

Claims for damage to your own property: Give us a call on 1300-ALLRISK, or send an e-mail to allrisk.com.au letting us know what's happened.

Your insurer will ask you to provide a quote for repair; they'd be unlikely to obtain quotes on your behalf unless your quote is unreasonable.

Claims for public liability or injury to others: Don't admit any responsibility (even if you think it really is your fault). The injured party will have to put their claim in writing - just say that you're referring the matter to your insurers, and any demands for compensation have to be in writing, so you can pass them on.

Step 5 - Tell us the dollar value of the loss

Make sure you tell us how much you need to make good the claim and put your project back on track. If you leave the dollar amount claimed off your claim form, the insurer can't possibly know how much they need to compensate you!

Step 6 - Keep records of the repair

Keep receipts and invoices related to the repair - we'll need to provide those receipts to show the insurer what costs you've incurred. If you don't have invoices or receipts, it'll be very difficult to prove your loss and how much the insurer needs to pay in order to reimburse you.

Step 7 -- Repair your project

Unless the insurer says otherwise, for most damage to your own project claims you should proceed with the best price quote for repair.

Insurers don't normally repair the project for you - since you're the builder with your own tradespeople on site, you are absolutely the best person to get the project back up and running.

If you'd rather wait for 100% confirmation from the insurer that your claim has been accepted, that's ok too. However insurers usually need a few days to assess the claim and work through their processes, so if anything's urgent you may need to get work done underway.

Step 8 - That's it!

Once the claim has been finalised, the insurer will reimburse you for the costs you incurred less the excess (deductible).

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