Insurance, it is one of those things we just love to hate, can’t do without it and always think we are paying too much.

But just what insurance will you need as you take on your owner builder project?

I can tell you, having been in the building industry for over 30 years you can never have too much insurance.

It is not just that on building sites things seem to grow legs, it is also necessary to have coverage against someone getting injured or property being damaged as a result of the works being done on your site.

As an owner builder, you are responsible for making certain that everyine on site is doing the right thing in respect to health and safety.

All states and territories in Australia have laws which detail the minimum standards of risk management and control measures that need to be in place to satisfy the requirements of safe work practises.

In most cases they will also specify the minimum insurances whci need to be hel by an owner builder in respect their project works.

For example, in most cases you will either be responsible for providing workcover for anyone employed directly on the ite or paid a wage and ensuring all contractors hold adequate workcover insurance for themselves and their employees.

In New South Wales, owner builders are responsible for taking out home warranty insurance to cover those works which are completed under the owner builder permit.

Home warranty insurance (also known as home owner’s warranty or builder’s warranty insurance) generally protects consumers of residential building services from financial loss caused by the builder’s failure to rectify or compensate for defective or incomplete work.

In New South Wales and Victoria, the cover applies when the builder has died, disappeared or is insolvent.While the insurer enters into a contract of insurance with the builder as the insured, it is the homeowner who is protected against loss.

In New South Wales and Victoria, home warranty insurance is compulsory for all residential building work carried out by builders valued at over $12,000.

For professional builders, generally Home Warranty Insurance is either paid as a levy against each project they undertake or is a provision of the licensing act for the particular state.

In the case of the owner buider, it must be held for the works undertaken, for the specified period and with an approved insurance provider.

In respect to other insurances:

Builders All Risk Insurance

Sometimes known as Construction Insurance.

This policy covers the works on the site and the material securely stored on site from theft, fire, storm, wilful damage etc.

It can also be extended to cover items in transit and other defined events as specified in the policy.

As with all insurance, be certain you understand the specific inclusion and more importantly exclusions.

Also what if any excess is included and how it affects the premium paid.

Public Liability Insurance

While it remains your responsibility to make the site as safe as is possible and to put in place certain risk management strategies, accident still do happen.

It may be a visitor to the site, a friend, a relative or even a member of the general public who falls, trips or in some way injures themselves on the construction site.

Should they seek to claim damages, you will need to be insured to cover any associated costs.

Quite often, a lower premium can be achieved through insuring for Construction (All Risk) and Public Liability with the one insurer.

Workers Compensation Insurance

WorkCover, or workers compensation insurance is to provide for loss of income due to accident or injuries received during the conduct of works on or associated with the a workplace.

It remains a legal obligation for anyone who employ staff on a full or part time basis to provide adequate workcover insurance.

As the Owner-Builder and therefore the Principal Contractor, it is your responsibility to:

Provide Workers Compensation for people employed on your site, or
Ensure all trades people and contractor carry their own policies and that these policies are current and appropriate.

You should contact workcover prior to engaging contractors to ensure you have an understanding of your liability in respect workers compensation should anyone you have engaged fail to meet their workcover obligations.

For more information on insurances for owner builders, visit the Owner Builder Courses website.

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