If you’re about to embark on building your own home yourself or planning on an extension or renovation of an existing home without a registered builder, you’re considered an Owner Builder. You need to consider a specific sort of insurance to protect your physical build and materials, as well as your Public Liability exposure.
What sort of insurance does an Owner Builder need?
There are a couple of important aspects to the insurance you need to consider as an Owner Builder;
Construction (property) cover
This provides cover for a variety of insured perils like theft, vandalism, fire, storm and wind, water damage etc (and in some policies, accidental damage) to the physical building in progress (called the “contract works”) and the materials on-site. This can also include any minor and major plant and equipment if not insured separately, as well as your tools and other equipment related to the build.
Public Liability cover
This covers your liability exposure on-site as the property owner and principal contractor or project manager, for any claims of third party injury or property damage as a result of your negligence. As the Owner Builder, you are considered responsible for all sub-contractors and visitors on-site and each insurance company will have different guidelines around how this impacts your exposure and premium. As a general matter of good business practice, you should always ensure you obtain copies of all sub-contractors own Public Liability insurance as well as their workers compensation insurance Certificates of Currency.
Pre-Existing Property cover
If you’re renovating or extending an existing property that is insured under a standard Home and Contents insurance, you need to let your insurers know of your plans and the value of the extension or renovation.
All Home and Contents insurance policies have limits on the value of building works on the property that they won’t cover above (usually in the region of $70,000). At this point, you may also have issues with insuring your contents, especially if there will be openings to the roof or walls where security or weather-tightness is compromised.
If your Home and Contents policy won’t cover the build as it is over their limit, cover for the pre-existing structure (i.e. the original part of the house not being extended or renovated) needs to be arranged elsewhere.
Owner Builder Contract Works Insurance
Luckily there are insurers out there that combine all of the above into one policy, that will cover your build for damage from insured perils, your liability, and your pre-existing property if required, under the one policy.
Owner Builder Insurance is important to get right as there are numerous considerations at play. Working with an experienced broker will mean getting the right mix and ensuring all aspects of your project are protected, giving you peace of mind so you can focus on the build.
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