Insurance for builders

A builder, like any tradesman, needs to be insured for any number of misadventures that can happen on site. Public liability insurance for death or injury to employees or passers-by, warranties for construction work, and loss or damages to the building are the major types of insurance.

Builder's warranty insurance

A builder's warranty is essential, as it provides a guarantee of workmanship to the new owner for a specified time. It is particularly important for owner-builders.

The collapse of insurance giant HIH in 2001 left a massive gap in the builder's warranty market. Up until that time, the Master Builders Association and the Housing Industry Association both acted as general insurance agents for their members. This included the builder's warranty. Members of the Master Builders Association were underwritten by HIH, the Housing Industry Association by Royal and Sun Alliance, who today underwrite 92 percent of all builder's warranties, although the market is slowly diversifying.

Public liability insurance

Whether or not a builder has full-time employees (which is rare) or contractors, public liability insurance is still essential. This is because occupational health and safety (OH&S) procedures are still the responsibility of the builder in charge, and any mishaps on site that result in injury will mean liability. Contractors will still need their own public liability insurance as they are technically in charge of their own business.

Public liability insurance may also cover a builder for materials damaged. Importantly, insurers will also act on a builder's behalf to fight bogus claims, and cover the costs of litigation fees.

Tradesman's insurance

This insurance not only covers builders for public liability, but also any loss of tools. Given the nature of the job, many builders often lose valuable tools while working on site, either from the site itself or the back of vehicles. This insurance will cover the loss of tools form either location. In some instances, tools must be nominated at the time of policy cover, and have nil excess and a limit of $500 per tool.

Employment practices insurance

Harassment, such as racial or sexual, can result in complaints being made against the builder. For example, Amelia, who was working as a rigger on a job, laid a complaint against her employer, as she was constantly harassed while working as the only female on site. She laid a complaint against her employer for not taking adequate measures to stop the harassment.

In such cases, it is worth noting that an unlimited retroactive clause should be included. If, for instance, "Gary", the builder, had already retired when Amelia made her claim, he would still be covered under his insurance, even if his policy is no longer active.