Insurance cover for building work

Insurance requirements for builders and tradespeople 

If you are a licensed builder or tradesperson in NSW, you must get home building compensation (HBC) cover for each home building project over $20,000 including GST.

HBC cover, which was called ‘home warranty insurance’, protects homeowners as a last resort if you cannot complete building work or fix defects.

Visit the State Insurance Regulatory Authority website for more information.

Insurance requirements for design and building practitioners

For design practitioners and professional engineers

Registered design practitioners and professional engineers must have professional indemnity insurance. This can be either an individual policy, a partnership policy, or a corporate policy.

For building practitioners

In addition to taking out Home Building Compensation coverage, from 1 July 2025 you must also be indemnified under an insurance policy for work you carry out as a registered building practitioner.

Choosing an insurance policy

When selecting an insurance policy, you must consider factors such as:

• your financial resources
• any risks associated with your work
• any limits of the policy and other factors outlined in the Design and Building Practitioners Regulation 2021.

You must make sure your policy provides an adequate level of cover to indemnify you for your work. 

Different practitioners will have different business risks. This will affect what cover is right for you. You must assess the adequacy of your cover based on your own circumstances.

You may need to show us that you have assessed the adequacy of your cover. You should seek independent advice on the amount and type of cover you need.