Owner-builder projects come with financial risks—from workplace injuries to construction defects. This guide explains the mandatory and recommended insurance policies across each Australian state, helping you avoid costly legal and financial pitfalls.
Main Content:
Why Insurance is Critical for Owner-Builders
Unlike licensed builders, owner-builders assume personal liability for:
Workplace accidents (workers’ compensation)
Construction defects (home warranty claims)
Third-party injuries (public liability)
Unfinished work (if unable to complete the build)
Each state has different mandatory insurance requirements, and failing to comply can result in fines or inability to sell the property.
Owner-Builder Insurance Requirements by State
| State | Mandatory Insurance | When Required? | Coverage Details | Penalties for Non-Compliance |
|---|---|---|---|---|
| NSW | Home Warranty Insurance (HWI) | Projects >$20,000 | Covers defects for 6 years for future owners | Cannot sell within 6 years without it |
| VIC | Domestic Building Insurance (DBI) | Projects >$16,000 | Covers defects for 6.5 years | Fines + cannot obtain occupancy permit |
| QLD | QBCC Home Warranty Scheme | Projects >$3,300 | Covers defects for 6.5 years | Legal action + sale restrictions |
| WA | Home Indemnity Insurance | Projects >$20,000 | Covers defects for 6 years | Cannot sell without insurance |
| SA | Not mandatory (but advised) | N/A | Voluntary policies available | Risk of lawsuits from buyers |
| TAS | No mandatory insurance | N/A | Optional defect & liability cover | No restrictions, but high risk |
| ACT | Required if selling within 6 years | Projects >$12,000 | Defects liability for future buyers | Cannot sell without insurance |
| NT | No mandatory insurance | N/A | Optional public liability cover | No penalties, but risky |
Additional Recommended Insurance Policies
Even if not required, owner-builders should consider:
Public Liability Insurance – Covers injuries to visitors/tradespeople.
Workers’ Compensation – Required if hiring workers (varies by state).
Construction Works Insurance – Protects against fire, theft, storm damage.
Contract Works Insurance – Covers materials & unfinished structures.
Leading Insurance Providers for Owner-Builders
Each state has approved insurers for mandatory Home Warranty/Indemnity Insurance. Here are the top options:
| State | Mandatory Insurance | Approved Providers (Official Sources) | Key Notes |
|---|---|---|---|
| NSW | Home Warranty Insurance (HWI) | ✅ HBCF (via icare NSW) ✅ QBE ✅ AIA Australia | Only 3 providers approved—HBCF is government-backed. |
| VIC | Domestic Building Insurance (DBI) | ✅ VMIA (govt. monopoly—vmia.vic.gov.au) | No private insurers allowed for DBI. |
| QLD | QBCC Home Warranty Scheme | ✅ QBCC Self-Insurance (for projects ≤$3.3M) ✅ Cove Insurance ✅ Honan Insurance Group | Private insurers only for high-risk projects. QBCC List |
| WA | Home Indemnity Insurance | ✅ QBE ✅ Vero (via Suncorp) ✅ CGU (Allianz) | Must be purchased before permit approval. DBI WA Guide |
| ACT | Required if selling within 6 years | ✅ QBE ✅ Terri Scheer ✅ Allianz | Check ACT Planning for updates. |
States Without Mandatory Insurance (Voluntary Options)
SA/TAS/NT: Consider Probuild Insurance, AAMI Construction Cover, or GIO Public Liability.
Critical Verification Steps
NSW: HBCF is the only provider for residential projects over $20k (source).
VIC: VMIA has a monopoly on DBI—private insurers cannot offer it (source).
QLD: QBCC provides a list of approved insurers for high-risk projects.
WA: QBE and Vero are the most widely used (Commerce WA).
