For builders and tradies

Key information

All building businesses must have HBC insurance for home building projects valued over $20,000 (including GST). Failure to obtain HBC insurance is an offence under NSW law.

HBC insurance is required when working directly with a developer, homeowner or owner-builder on the construction of new homes, new apartment buildings up to 3 storeys, swimming pools and renovations of existing buildings (including apartments over 3 storeys), unless exempt. Building businesses that are doing residential development on their own land (‘spec' builders), must also purchase this insurance.

Sub-contractors to a building business do not need HBC insurance as it is the responsibility of the building business to ensure the work is covered. You can find more information about this in our fact sheet on Insurance obligations for residential building works.

Before starting work or taking payments (including deposits) from the developer, homeowner or owner-builder, you must provide the certificate(s) of HBC insurance to them.

Getting insurance

You must get insurance for each home building project over $20,000, unless exempt, before starting work or taking payment (including any deposit) from developers, homeowners or owner-builders. If your business is building homes on its own land (a ‘spec' build) you must have HBC insurance before starting the work.

icare HBCF is the only insurer for HBC insurance in NSW.

Before you buy insurance for a specific project, you must apply to icare for eligibility. Visit icare to check your eligibility.

Building contracts and HBC insurance

Your building contract must clearly state the HBC insurance cost, as well as any associated brokerage, fees and taxes. While you may add a margin for arranging insurance, this should not be included in the ‘cost of cover’ section but instead should be listed separately in the contract. If the contract is signed before you buy the HBC insurance, include a reasonable estimate of what the insurance will cost.

You can get an estimate by entering the project details in icare’s online premium calculator.

You can include provisions in the contract to allow for price adjustments to recover any difference between the actual cost of insurance and your estimate. Refer to the 'Variations' clause in the NSW Building Commission Home building contract template for work valued over $20,000 for guidance.

Failing to buy insurance

If you do not buy insurance:

• you will not be able to make a claim for payment under the Building and Construction Industry Security of Payment Act 1999
• you may be prosecuted (including imprisonment).

The Building Commission NSW may:

• take disciplinary action against you
• issue you a penalty (penalties are published on Building Commission NSW’s licence register).