Getting covered when it seems impossible

While owner builder insurance is becoming easier to obtain, there are still a number of stumbling blocks.

Alternative Building Materials

Houses built with rammed earth, straw bale, mud brick and other alternative materials, are becoming ever more popular. Nowadays not only do the majority of people know about these construction methods, but they could probably even tell you a few of the benefits; energy efficiency, cost advantage, noise reduction, durability, aesthetic appeal, lower environmental impact, etc.

And yet, for all of this, it is still difficult to get insurance for these projects. Why?

It really comes down to how well the insurer understands what you are actually going to be doing, and what risks are involved. In order for insurers to offer you cover they need to have a thorough understanding of the associated risks. If they don't, they generally will not offer you insurance. In some cases, if they understand the risks only moderately well they may offer you insurance but at uncompetitive prices, and often with some major exclusions to limit the cover afforded by the policy. The ideal situation is where they understand the risks well, in which case the insurer will offer you reasonable cover at reasonable rates. That's the theory, but how is it put into practice?

In recent years as the popularity of alternative building materials has increased dramatically, the demand has also significantly increased for insuring these projects. Insurers do tend to eventually respond to these levels of demand, and then react by seeking the degree of knowledge and understanding that will allow them to offer competitive products to meet the demands.

So what's the solution?

Ultimately the issue is supply and demand. The key is not to give up too quickly when one insurer says "no". If you are not asking for the insurance then the perception is that there is not much demand, and therefore the problem never gets resolved.

There are other organisations whose activities are also helping greatly to educate the insurers. All around Australia, companies are springing up who exclusively provide guidance, training and even direct assistance in using alternative building materials. With this kind of help, the risks associated with an alternative build can be reduced significantly.

There are benefits that come out of this in relation to insurance. For starters, if the owner builder is trained in the best methods to do the job, they are taking fewer risks. When insurers become aware that there is method and discipline involved in these projects their perception subsequently improves. The other long-term benefit is that a well-guided or well-trained owner builder ultimately has fewer insurance claims, and over time that brings prices of insurance down.

It's important to point out that while there are specific alternative building method trainers, there are also the general owner builder courses to consider. In some states like NSW, QLD, WA and ACT it is compulsory to do an owner builder course before becoming an owner builder. In the other states these course are however also available, with options both online and in person, so please do consider doing a short course, even if not absolutely required.

(note: The required owner builder courses cover regulatory information, as well as some basic project management, budgeting and scheduling information.)

So how's the availability situation now?

Sadly, availability for construction insurance is still very limited.

There are two major reasons why this may be the case. The first is that insurers, while having a good understanding of the static risks associated with the already constructed buildings, still do not fully understand the risks involved in the actual process of building them.

The second, and more likely, reason is that of potential variability. An example of this would be the availability of tradespersons in your local area who are qualified or experienced in handling these building materials, and the proper techniques for the application of them. The lower the availability of expert assistance, or even advice, the greater the inherent risk. As discussed above, this situation has improved in leaps and bounds in recent years. We are just waiting for the insurers' perception to catch up with the reality.

Whatever the reason, unfortunately most owner builder insurance schemes do still discriminate in one way or another against alternative construction types. But there are insurers willing to offer you good cover at a good price; it's just a matter of coming to the right supplier.

Commenced Projects

Owner builders who seek insurance after already having begun work on their projects are often surprised to find that it's difficult to get cover.

Here are the top four reasons given by owner builders as to why they wait this long before attempting to obtain insurance:

'We knew that we needed insurance but then we forgot! We got caught up in everything and it just slipped our minds.'

'I didn't think there was much risk on the site in the early stages so I waited until now to look into getting insurance.'

'I hadn't thought about it at all, but now our bank says they won't lend us the money to finish the project unless we have insurance.'

'I'm a builder or tradesman myself and I already have insurance for my business. I've only just found out that my business policy doesn't cover me for this project as it's not a business activity.'

The first reason listed above is the most common, and a perfectly understandable one.

Unfortunately this explanation still doesn't help matters if an insurer has a policy of not providing insurance where the project has already started, as some insurers do.

It is common to think about construction insurance in the same way you think of regular house and contents cover, where your primary consideration is material loss or damage. On a construction site, material loss and damage is important but it is always the secondary consideration; the primary concern being public liability. From the very first day you do site preparation work you have a public liability exposure, which is an issue that requires your serious attention. In fact, your local authorities generally stipulate that you must have this insurance, however, this is often in the fine print and they may not mention it verbally or follow you up on it. As an owner builder, you are officially in charge of the site for the duration of construction, and any damage to neighbouring properties, or even more importantly an injury to a third party, will almost certainly end up landing squarely in your lap in the form of a public liability claim.

Where the owner builder is also a building professional, a common assumption is that the business insurance will cover the project.

While you are on the site as an owner builder, the activities you are undertaking have no link whatsoever to your business (ie not being done under your ABN). So any public liability claim made against you will be against you as the individual who holds the owner builder licence, and not against your business. As such your business insurance would not respond to this claim. Even if you formally invoiced yourself, you would only slightly decrease your exposure; you would effectively become two separate legal entities, the owner builder and the contractor, each performing different tasks and with different responsibilities. The majority of claims will be directed at the builder in charge of the site in any case, not the contractor. There's no substitute for the right advice and the right insurance.

So what can be done about it?

Until recently you would have been required to jump through all sorts of hoops in order to even get a quote on insurance mid-project. Current engineering and progress reports, formal written declarations, increased premiums, higher excesses, delays in placement of cover while all the above information was processed and given 'due consideration'... this is a rough idea of what you'd have been likely to face, assuming you were speaking to one of the insurers willing to look at it at all.

Some insurers will still decline to offer cover or will require something similar to the above. But things have improved. Even if you are 90% of the way through the project you will now find at least a couple of insurers who are willing to offer cover.

So it's no big deal if I forget to get insurance, right?

Wrong. Don't let the fact that you will usually be able to get cover at any stage of the project make you become complacent. Firstly, when you do obtain insurance it will generally cost slightly more than if you'd had the policy right from the start (so you may as well have it from the start). More importantly, if something does go wrong before you get the cover in place you WILL NOT be covered, even if you take out insurance immediately after.

Ideally, if you haven't started your project yet, get the insurance in place before you commence any work. If you have already started your project get the insurance in place as quickly as you can.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

For more information about Insure me if you can, Please visit our website.

Why you need it but don't have it

We all love a challenge. So why move, when you can renovate? It's the Australian way. And if there was any doubt about that, figures from the Australian Bureau of Statistics verify that renovating accounts for nearly half the total value of construction work across the country each year.

There's a whole lot of money in renovating, and a whole lot subsequently at risk. And yet it seems that the vast majority of people doing extensions and renovations don't get any additional insurance, even though they are risking the value of their project, and... here's the part they are unaware of... generally risking their entire house (which they thought was insured but ultimately wasn't).

According to figures gathered in conjunction with some of the providers of owner builder training courses, it would appear that upwards of 79% of renovators don't take out any insurance.

This may not come as much of a surprise to many of you. We can all appreciate that there is a great deal to consider when extending or renovating and insurance is likely to be placed by many people towards the end of the list.

Most home owners think, "we have a house insurance policy, and renovating is pretty common, therefore our policy probably covers renovating.' Unfortunately, this is a case where our instincts are way off target.

Most home insurance policies will not cover much of anything during the course of a renovation over $50,000 in value (and very little even below that amount). Statistics suggest that well over half the renovations being done each year are above $50,000.

But what if you're one of those who is still thinking, "that's ok, my project's replacement value is easily under $50,000 so everything is okay". Well, it really all depends on what you consider to be 'okay.' In the examples we will look at in this article we found the cover provided by the home insurance policies to be far from sufficient.

Questions to be asked

In those few cases where your policy will remain in place, you should still question how much the policy will really be covering? And what are the right questions to ask your insurer to get the important answers that you need? We agree with most renovators that this is not at all obvious, until you're told about it. And we can certainly see why it often gets tossed into the 'too hard basket.' But fear not! We've taken some of the sweat and uncertainty out of this issue for you.

Let's discuss some of the questions that you should ask.

We even took it a step further and got our hands on the home insurance policy wordings from three of the largest home insurers in Australia.

We carefully worked our way through the information, and finally compiled the summary below. We decided to leave the insurer's names out of this article for the following reasons: a) insurers often have more than one policy wording, and b) policy wordings are regularly revised and/or have supplementary additions issued. We are however suggesting that this information is still a good representation of policies that are available.

Q1: Does the policy cover Public Liability claims that arise out of a renovation?

Insurer A : No, not if renovation value is over $50,000.

Insurer B : No, not if renovation value is over $20,000.

Insurer C : No, never.

There is a significantly higher likelihood of a Public Liability claim occurring during a renovation project compared to at other times. This is why your existing house insurer is often not keen to cover these claims, and why they rely on you to get construction insurance to cover it instead.

Q2: Does the policy cover Public Liability claims for removal or weakening of supports or foundations?

Insurer A : No, never.

Insurer B : No, never.

Insurer C : No, never.

Ok, it seems like the message is loud and clear on this one. Other types of liability claims might be covered by some of the insurers if your project value is under their rather modest limits, but they all agreed that they don't want to touch any liability claims arising out of damage to a neighbour's house caused by vibration or excavation.

To decide if this is a real problem for you, answer the following:

Will you be a) doing any excavating, b) doing any compacting, c) having any trucks or other heavy machinery visit the site, d) constructing a retaining wall.

If you said 'no' to all the above, you might be okay on this point. If in doubt, you need construction insurance.

Q3: Does the policy cover any loss or damage to your home as a direct or indirect result of a renovation?

Insurer A : No.

Insurer B : Yes, but only in some very limited cases.

Insurer C : No.

Two of the policies specifically excluded this. Insurer B did not spell it out, but you'd still have a number of problems. For starters, Insurer B's policy stated that cover ceases entirely for any section of the house that is undergoing renovation. How that is applied in a practical sense? Your guess is as good as ours.

Additionally the policy's Duty of Disclosure would require that you informed your insurer before starting the renovation. Due to this change of circumstances they might (and often will) even withdraw cover altogether.

If the policy continued it would also generally be on the basis that any and all security measures (alarm, key locked windows, deadlocked doors, etc) that were a requirement of the policy originally, continue to remain intact and working. For most projects this becomes tricky.

As the home owner I'd prefer it if Insurer B had just said 'no' like the other two, so that I understood clearly (without the extra digging) that I needed additional insurance.

Q4: Does the policy cover new structures while the project is not yet complete?

Insurer A : Not excluded. May be covered in some cases.

Insurer B : No.

Insurer C : No.

Insurers B and C made it clear that your new structures aren't covered until your project is finished and you then update your policy to include cover for them. Insurer A remained silent on the topic so they may or may not (probably not) respond to a claim.

What's not covered

What you should have taken from the above exercise is that during the course of your extension or renovation project the following things are not likely to be covered by your regular house and contents insurance policy: public liability claims, new structures, building materials, and even your existing house and contents.

Putting that slightly cynical summary aside, there certainly are some major concerns as I'm sure you'd agree. And we've only touched very lightly on some of the bigger problems.

So what's the solution?

Take out appropriate insurance!

Some providers of this insurance use two separate names for this type of cover; "Owner Builder Insurance" - for those constructing a complete new house, or "Renovators Insurance" - for alterations and additions to an existing house. Most providers however do not make this naming distinction, instead catering for both these types of project under the one banner of 'Owner Builder Insurance', with or without covering for existing structures.

Basic cover

The most basic form of owner builder insurance will cover: 1) public liability, 2) any new structures you are erecting, and 3) building materials.

We strongly advise you to take out the above insurance as an absolute minimum. The down side is that it won't provide any additional cover for the existing house, which you're likely to need.

Including cover for existing house

This is the recommended solution. It offers the same cover as above but is also inclusive of cover for the existing structure.

Some owner builder insurance policies will provide the 'existing structures' option as a partial cover (i.e. damages arising directly from the project), and optionally a more comprehensive cover for losses that do not relate to the works. Depending on how much your existing policy is going to exclude, you may need this extra level of cover.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

For more information about Renovators Insurance, Please visit our website.

Why owner builders need more than just 'workers compensation' insurance.

Planning an owner builder project is an all-consuming process. It's exciting and sometimes even a little scary. Owner builders can find themselves putting all their energy into planning for the building process and sometimes forget one of the absolute basics which should be attended to before starting: insurance. Some owner builders end up seeking insurance part-way through the project (which can be difficult or more expensive to obtain), while others get caught up in the excitement and don't spot the oversight at all. In doing so they not only leave themselves dangerously exposed but can be in breach of legal and/or statutory requirements.

Other owner builders are well prepared, having considered the risks, and aware of the need to insure. But here's where prior experience can lead people astray. Before embarking on their first construction project most people are familiar with straightforward insurance: you have a house - you get house insurance, you have a car... Well, you can see where this example is going. But construction is not so simple.

Risk assessment

When considering the risks involved with an owner builder project most people realise that the insurance should cover the building and the building materials against fire, theft, storm, vandalism, etc. during the course of the project. This insurance is called 'Contract Works' and is essential.

The second realisation is that you'll need some insurance in case someone gets injured on the site. This is the complex part and it is where the owner builder can potentially make some incorrect assumptions.

What claims can arise out of someone being injured?

Workers compensation

Public liability

Personal accident

The biggest source of confusion is the difference between points 1 and 2. It is commonly assumed that if someone is injured on a work site that they will automatically lodge a workers compensation claim. However this is not always the case.

Workers Compensation

In order for the injured party to successfully claim workers compensation from you they need to:

have been injured while working on your project, and

qualify as a 'deemed worker' as defined under the relevant state or territory's workers compensation legislation.

Since qualifying as a deemed worker can only be certain one way or the other after the claim is made, there is still a strong likelihood of this type of claim even where it is ultimately unsuccessful. In these cases having had workers compensation insurance will have removed the onus on you personally to defend the claim, along with the related legal expenses in doing so.

Public Liability

Public liability claims can arise out of damage to someone else's property or an injury to a third party. For the purpose of this article we'll only be discussing the latter; however it's important to note that if you have a public liability policy in place you'll be covered for both.

Injury-related public liability claims arise when, for whatever reason, the injured party believes that you are responsible for their injury by way of negligence. Since an owner builder is effectively in charge of all activities undertaken on the construction site, in addition to being responsible for ensuring the safety of the site, this can often make you somewhat of an easy target. Having said that, the onus is then on the claimant to prove their case against you, and they may or may not be successful in doing so.

For this reason the claimant (if they are also a worker) may even attempt to claim workers compensation as their first option.

A public liability claim may then be made if they are unsuccessful in getting workers compensation, or if they obtain a workers compensation payment but wish to claim against you for amounts above and beyond limitations within the workers compensation system.

If the injured party is definitely not a worker (for example a visitor, whether invited or not), then there will be no such confusion. The claim will always be a public liability claim.

Personal Accident

If you, your spouse or friends ('volunteer workers') are intending to be involved in the physical labouring on your project without receiving payment, you may wish to take out personal accident insurance. This is important to consider since you will generally not be able to claim under either workers compensation or public liability for your own injury.

This insurance can be obtained either individually or as a group policy. You may already have an income protection or a personal accident policy in place and these may be suitable (ask your broker). If you don't already have a policy of this type, or if you expect to have volunteer workers, then a group personal accident policy may be the most suitable option.

This type of policy generally covers the owner builder and declared spouse while performing work at the project site, and any other person carrying out work on the same site who does so without being paid. Contact your owner builder insurance advisor/broker for further details.

A group personal accident policy applicable to you, your spouse and friends/family who are not being paid, is called 'Voluntary Workers' insurance and will usually be provided in your quote as an option.

When to take out workers compensation cover

In each state and territory of Australia, workers compensation legislation provides owner builders

with the following advice:

'Homeowners who are building their own homes should take out a workers compensation insurance policy to make sure they are fully covered. Any contractors engaged by an owner builder may be deemed to be a worker of that owner builder.'

While the wording of this advice varies slightly from state to state the message remains the same; owner builders need to take out a workers compensation policy.

Here's a more detailed explanation:

If the local government body who issues planning permits requires you to have a workers compensation policy as part of documents submitted to Council, you will need to have a workers compensation policy in force for the duration of the project.

If a policy is not required as above, and if you are in NSW or Vic you may in some cases be exempt from taking out a workers compensation policy if the 'total value' (not just 'per worker') attributable to labour is less than $7,500.

From the total estimated cost of the project, deduct the cost of materials.

Deductions can also be made for any contractor who is incorporated (Pty Ltd). If the amount remaining exceeds $7,500, a workers compensation policy should be taken out for the duration of the project.

If the amount attributable to direct labour is less than $7,500, the workers compensation system (as of 30 June 2008) automatically holds the employer covered - if an injured party then succeeds in identifying himself as a deemed worker (and therefore entitled to workers compensation), a policy automatically then comes into force and the 'employer' is asked to pay a nominal premium of $175 and the claim will be processed.

* If you are in any state other than NSW/Vic the $7,500 threshold does not apply. You will have the same requirement to take out a workers compensation policy even on small projects.

If you engage any workers who provide labour only (no materials), even if payments for services are sometimes made in cash, ignore point regarding the threshold mentioned above. In these cases the likelihood of them being shown to be a deemed worker are significantly greater, and you should always obtain a workers compensation policy.

Can't I just confirm that contractors all have their own workers compensation policies?

This is a very common fallacy, perpetuated by word of mouth and even many websites that provide advice like:

'Generally, people carrying on their own business, or trades people, have their own workers compensation insurance. To be sure that you are protected always check that any licensed contractors you hire have their own workers compensation policy.'

This advice is why so many people get it wrong. It's not actually that the information is altogether incorrect, but it is ultimately wrong by way of omission. It is vital for you to remember that when you take out a workers compensation insurance policy it does not cover you, it covers your workers. So by having the contractor show you his own insurance policy you only ensure that his workers are covered if they claim against him. It does nothing to change your potential responsibility for any injury to the contractor himself, or any other 'deemed worker.' It will not have any impact on your need to obtain a workers compensation policy.

(* The exception to this rule is where you engage incorporated companies (Pty Ltd) to do the work, as discussed earlier. However it is very unlikely that you will be able to use this type of contractor exclusively, so again this tends not to help.)

Conclusion

If all of this has left your head spinning you may get just a little comfort from knowing that you're not alone. The following is all you really need to remember - practically every owner builder has an exposure to potential claims under the workers compensation system. If you are an owner builder you must seek individual advice from an expert who is dealing with owner builder insurance on a daily basis. And you will almost always need to get a workers compensation policy in addition to contract works, public liability (and personal accident if applicable). You'll then have one significant thing less to worry about while you get on with the actual project.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

For more information about Injury Claims, Please visit our website.

Home Warranty insurance covers the risk of the owner builder disappearing or going bankrupt, and being unable to fix defects in the sold house.

It is absolutely not required when building, owner builders only need to buy the insurance when selling in the prescribed period, and even then only in VIC and in WA.

For VIC, 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

For WA, we can provide indicative pricing: "); background-size: 1px 1px; background-"3">

https://allrisk.com.au/owner-builder-warranty-insurance-quote" target="_blank" rel="nofollow">https/allrisk.com.au/owner-builder-warranty-insurance-quote

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

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Getting Insured ... and getting it right

Owner building is a financially and mentally rewarding way to pass a year or so of your time. As long as you remember to think of yourself as a 'builder,' and to approach all matters involving your project with that particular mind-set, the risks can be managed in such a way as to allow you to also retain some peace of mind.

When insurance is needed

A builder, regardless of whether they are a registered builder or an owner builder, faces some very specific risks and responsibilities that need to be managed, and that means also having the right insurance.

If you're an owner builder you need owner builder insurance; there are really no exceptions to this rule. An owner builder license is issued to you so that you can assume the role of 'builder' for a construction project, and this requires that you insure responsibly. The obvious risks are those that result in your own material loss or damage, and these are purely a financial risk for you i.e. can you afford the loss? The bigger issue is that of Public Liability exposure. As a builder you will be held responsible for damage caused to anyone else's property and even more importantly, for any injury caused to a third party. Serious or even permanent injuries can occur on even the smallest projects, which is why your local authority may even insist that you show evidence that you've arranged owner builder insurance before commencing your project.

What if my local authority doesn't ask me to arrange insurance?

To become an owner builder you will need to do two things:

Get a building permit, issued by your local council, and

Get an owner builder licence.

Your local council will always advise that you must be insured properly, when they pay attention to the fact that you are also an owner builder. If you were engaging a registered builder instead, the builder would hold these insurances already, so your council would not need to advise you on this issue. For this reason, the matter is sometimes overlooked and you may not be told of this requirement. This does not remove the need however. Always be prepared and be insured. Remember, the smaller the project the smaller the cost of the insurance, so there is no reason to use the size of your project as a potential reason to put the thought aside.

When should you start getting advice?

In the earliest stages of preparing to be an owner builder you will find yourself looking into various expenses and getting quotations. You may even go through this activity before you decide if becoming an owner builder is right for you. Get some advice on insurance and a rough quotation at this stage. The quote will normally only be valid for 30 days but this is okay, as when you do need to arrange cover your advisor will already have all your details, and you can simply update the quote. This will save you time later and allow you to include the insurance cost into your budget.

What information will you need?

In order to get an initial quote there is actually very little information you will need. Many people delay getting a quote on the assumption that they will not yet have the information that will be required. Here's what information you will need to provide in order to get a basic quote:

Your name and email. This allows the quote to be stored and retrieved.

The postcode where the project site will be located.

The project value.*

* Remember that the insurance will be covering you for 'replacement', so this dollar value is not what the project is expected to cost you but what it would cost the insurer to pay for the same project to be done again by a registered builder. Use a rough figure at this stage if you are unsure.

When to get a firm quote?

Once you are 30 days or less from expecting to commence work on your project, contact your insurance advisor again to update the quote. If you are confident with the advice you've received, you may also choose to arrange the insurance at this time and nominate a start date. Your insurance advisor can arrange the insurance ahead of time to commence at the date you specify. By this stage you may also need to provide the local council with evidence that you've arranged insurance, so requesting that cover be arranged now will allow you to provide this evidence.

When to start cover?

If you've not already requested the cover to be arranged at the quote stage, be absolutely certain to arrange cover prior to commencing work on the project. If you neglect to do so, the insurance will become more expensive, and you will be uninsured for any losses (injury liability in particular) between the time that you start works and the time that you then arrange the insurance.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

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Don't Worry, Mate, I'm "Fully Insured"

What does someone mean by that? What does "fully insured" actually mean?

... Not much, I'm sorry to say.

What is Tradesman Insurance?

Most tradesmen have business insurance for Public and Products Liability, Motor Vehicles, and possible Tools of Trade insurance.

Some may even have Workers Compensation for their workers.

A common misconception for owner builders is that as long as all contractors have their own insurance, the owner builder has nothing to worry about.

Wrong

The tradesman's insurance covers the tradesman only, it doesn't protect the owner builder. Take public liability, for example, if the tradesman injures someone, the tradie's public liability insurance would be expected to step in and defend the tradie and pay compensation to the injured person. On a construction site however, the injured person will usually level their claim against the builder in charge of the site (in this case that means the 'owner builder').

The owner builder is not covered by the tradie's insurance. Only your own insurance can respond to a claim directed at you. The owner builder needs their own public liability insurance to protect against being sued by that injured person. Although it may be that the owner builder isn't eventually responsible, there will still be significant legal costs in defending the claim.

What About Workers Compensation?

Even if your tradesmen have workers' compensation insurance, it doesn't necessarily cover the tradesman himself - it probably only covers the workers of the tradesman. If the tradesman is a Sole Trader or Partnership (i.e. anything but a Pty Ltd company), then in most states the tradesman cannot buy workers compensation for himself. Yet he may be deemed to be the worker of the owner builder.

Be very wary of other companies telling you that you don't need workers compensation insurance. It usually only means they don't (or aren't able to) provide workers compensation cover for owner-builders; by law no other insurance can cover the same risks as workers compensation. Public liability insurance can only cover the gaps - i.e. cover your liability to pay when it is not required to be insured under workers compensation legislation. Even if WorkCover in your state says that you don't need a policy, we urge you to make sure you have that in writing - because no-one can foresee what might go wrong, and the "not previously required" policy can actually turn out to be legally required.

We're Here to Help

Insurance for owner builders doesn't have to be hard - our quote form takes fewer than 2 minutes to complete and will instantly e-mail you a quote with more information.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

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... because there are lots of things that can go wrong on any project.

Public Liability

Covers your legal liability to pay compensation to others for personal injury or property damage arising from your project.

For example, this could be:

a visitor to the site falling over a pile of bricks or hurting himself on building materials

a workers compensation insurer suing the owner builder for injury to a contractor

a fire started from hotworks and spreading to the next door neighbour's house.

NB: We strongly recommend that you buy workers compensation insurance to cover contractors who may be deemed to be your worker. Public liability insurance cannot cover workers compensation liabilities.

Damage to the Project

Covering accidental and unforeseen damage to your project, such as:

bushfire, fire, arson

storm, water damage, flood, burst pipes

vandalism and theft of building materials

earthquake, lightning

impact from a vehicle running off road

tree branches falling onto the property

and more ...

... including sudden & accidental damage neither expected nor intended by you.

Damage to Building Materials in Store

Covering materials at the manufacturers awaiting transport to your site (e.g. if the manufacturer passed title to you upon payment, while still in the manufacturer's care).

Transit Covering materials (but not transportable or moved homes) while in transit to your site.

Theft of Building Materials or Your Tools

While on your site waiting for installation.

Volunteers' Loss of Income

If injured while helping you out on the project.

Workers' Compensation Covering your responsibility under your State's workers' compensation act. Even though contractors aren't your employees, they may be considered to be your workers for the purpose of the act if they're sole traders (or partnerships), or if they are sub-contractors working for your contractors, and are not correctly insured by the contractor.

Below is a list of these topics and you can use this Table of Contents to jump to the part that interests you the most.

https://allrisk.com.au/" target="_blank" rel="nofollow">For more information about Owner Builder Insurance Covers More Than You Think, Please visit our website.

For an owner builder, the existing structures are any buildings on the property prior to the period of insurance.

This means that existing structures could be:

The home you're renovating; or

Outbuildings or fencing you need to insure; or

The work you've completed before taking on a new insurance policy with a new insurer

Should I insure these Existing Structures

Most of the time, your regular home insurer won't agree to insure the home building you're renovating against damage for the period of the renovation. Some of these insurers say "no cover for damage caused by the renovation", some say "no cover at all", and some confusingly alternate between the two statements, depending on how deeply you question the insurer's call centre staff.

For peace of mind, we generally recommend that you insure the existing structure with the construction insurance (we can provide quotes for Standard Existing Structures as well as Deluxe Existing Structures).

Can I include the Existing Structure in the Contract Value

Unless you have a special agreement with the insurer, we'd strongly recommend against trying to include the Existing Structures sum insured in the regular Contract Value sum insured.

Insurers define Contract Works to be the work undertaken during the Period of Insurance, not works completed prior to the current period. If you're changing insurer, you have a new Period of Insurance, so the pre-existing work may or may not be insured. At worst, an insurer may refuse to pay for the pre-existing work (because it's not in the insured period), or at best may only agree to pay after negotiation.

We'd recommend avoiding this trap and making sure that you insure the already-completed work as it should be insured, under the Existing Structures.

Existing Structures Cover Options

Our quotes provide two levels of cover: Standard Existing Structures and Deluxe Existing Structures.

Standard covers the existing structures against any damage caused by the project (i.e. caused by the work insured under the Contract Value sum).

Deluxe covers the existing structures against other damage - e.g. fire, storm, theft, malicious damage, earthquake, impact, flood, and other sudden and accidental damage neither intended or expected by you.

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There's actually no right or wrong answer to this question - the right amount of insurance is the amount you need depends on how much financial risk you're willing to take on your project.

Common types of insurance

Owner builders typically consider insuring:

Damage to the project itself (e.g. theft, storm, fire) - contract works cover

Injury to others or damage to other property - public liability cover

Theft or damage to the owner builders tools - tools, plant, and equipment cover

Damage to the existing structures on the block - standard or deluxe existing structures cover

Injury to volunteers causing their loss of income - volunteers cover

Injury to contractors and "deemed workers" - workers compensation

The only compulsory type of insurance is workers compensation - and whether you need a policy or not depends on which state of Australia you live. In most states, sole trader or partnership contractors (e.g. not Pty Ltd) may be "deemed workers" - since you're engaging a person (not a Pty Ltd company) to work in your "business" of being an owner builder, and are paid for their personal exertion.

The rules in each state are a lot more complicated - we always recommend that you either arrange precautionary insurance, or speak to one of our experts, or at least talk to WorkCover in your state to assess your requirement (our experience is that you may get a different answer from WorkCover depending on which way the wind is blowing however).

How much contract works do I need

We'd suggest insuring for enough to pay for a professional registered builder to complete the job on your behalf. You don't have to - there's no problem in only insuring for the cost you would incur in doing the work, but ask yourself if you would really want to do it again if the project is destroyed near completion?... or to come up short when paying professionals to do all the replacement works after a claim.

How much public liability do I need

Since you can't know what might go wrong, our best advice is that you should purchase the maximum amount you can comfortably afford. We'll give you options for $5 million, $10 million, and $20 million covers. Sometimes your council or your bank/lender may have a minimum requirement too.

What about volunteers

If you personally are going to work in your project, it's reasonable to think that your friends and family are going to pitch in to help out. If you, your partner, or one of your friends or family members is hurt on the project, they can't claim workers' compensation - you're not paying them and they're not your "workers". We give you options to insure the volunteers' loss of income as a result of an injury while helping you for free on your project.

Options options options

Our quote process takes less than 2 minutes, and will instantly e-mail you a quote with many options. We try to make the process as simple as we can - next to each quote option we give you the price. Don't want one of the options presented? No problems, you don't need to take it.

We don't hide prices and costs in all-in-one quotes where you can't see what you're paying for. We want you to make an informed choice about what cover you need on your project.

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Things can go wrong on even the most meticulous of owner builder projects, and that's why you should have comprehensive owner builder insurance.

Damage from theft or vandalism is possibly the most heartbreaking, but (other than Public Liability claims) storm damage is one of the most costly things to go wrong.

Lodging a claim doesn't have to be hard. The 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, you have insurance covering damage to your project and public liability insurance protecting you if you're sued for accidental injury or damage to others.

Step 2 - Grab your camera and take some photographs

A picture is worth a thousand words - so early 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. If you've been keeping a development diary (an excellent idea to document your progress), make a note of the date and time the damage occurred and the date and time you discovered the loss.

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: Grab a claim form here and send it to us by e-mail, give us a call, or send an e-mail letting us know what's happened. Most times your insurers will ask you to provide a quote for repair (since you're a builder, you should be well placed to have your tradesmen give you an urgent quote), and they'll assess the claim based on your claim form and the repair quote. If the claim is very large, the insurer may wish to appoint an assessor to help work through the claim process.

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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