Frequently Asked Questions

Do I need home warranty insurance for my job?

You need HBCF cover if you are doing residential building work in NSW where the contract price is over $20,000, including GST and all variations. This is set by the Home Building Act 1989 and it is not optional. The cover must be in place before you take any money from the homeowner, including a deposit, and before work starts. The threshold applies to the contract as a whole, so a job that starts under $20,000 and passes it through variations needs cover too. Owner-builders are treated differently from licensed builders, and some work is excluded from the scheme. If you are not sure whether a particular job crosses the threshold, send us the contract details and we will tell you before you sign.

Who pays for home warranty insurance in NSW?

The builder takes out the HBCF policy, and the premium is normally passed on to the homeowner as part of the contract price. A homeowner cannot buy this cover themselves, which is why it is the builder’s responsibility to arrange it before taking a deposit. Although the builder is the one who applies and holds eligibility, the policy protects the homeowner: it pays out to them, not to the builder, if the builder becomes insolvent, dies, disappears or has their licence suspended. Because the premium sits inside the contract price, it is worth quoting it accurately from the start rather than absorbing it. We can confirm the premium for a specific job before you price the contract.

How much does home warranty insurance cost?

There is no flat rate for HBCF cover, so we do not publish a price. The premium for any given job is driven by the contract price, the type of construction, and the eligibility profile icare HBCF has assessed for your business, which reflects your financial position and risk category. A single dwelling and a multi-unit development of the same contract value are not priced the same, and two builders with different eligibility assessments will not pay the same premium on identical jobs. The only reliable figure is one calculated against your actual eligibility profile and contract. Send us the job details and we will come back with the premium, usually within 24 to 48 hours.

Does a tiler, carpenter or other trade need HBCF cover?

It depends on who you contract with, not on your trade. If you contract directly with the homeowner for residential building work in NSW over the $20,000 threshold, you need HBCF cover in your own name, whatever your trade. If you are engaged as a subcontractor by a head builder, the head builder holds the cover for that project and you do not need your own policy for that job. This catches out trades who mostly subcontract and then take one direct job from a homeowner. Specialist work such as certain kinds of repair or non-structural work may fall outside the scheme. If you contract directly with homeowners at all, talk to us before you sign.

What does HBCF insurance cover?

A Certificate of Insurance issued by icare HBCF compensates a NSW homeowner for losses from defective or incomplete residential building work where the builder or tradesperson becomes insolvent, dies, disappears, or has their building licence suspended by NSW Fair Trading for failing to comply with a money order made in the homeowner’s favour by the NSW Civil and Administrative Tribunal or a court. A policy covers loss of deposit where work never commences, claimable for up to 12 months; failure to complete work, up to 20% of the contract price including variations, claimable for up to 12 months from when work stopped; major defects for up to 6 years from completion; and non-major defects for up to 2 years. Full terms are set out in the policy for each property.

How much does an HBCF policy pay out?

The maximum cover is $340,000 per dwelling for policies issued on or after 1 February 2012, and $300,000 for policies issued before that date. Cover extends to subsequent purchasers of the property, provided the policy has not already been exhausted by an earlier claim, so a home sold within the cover period carries its protection to the new owner. Where a homeowner becomes aware of a loss during the period of insurance but cannot claim yet because the builder can still be pursued, they may claim after the period ends, as long as the loss was properly notified to icare HBCF during the period of insurance and they have diligently pursued their statutory warranty rights until a trigger event occurs under the policy.

How do I apply for HBCF eligibility?

To apply for NSW HBCF eligibility, complete and sign the eligibility application form and return it to team@hbwsolutions.com.au with your supporting documents attached. Eligibility is the first step and is separate from insuring an individual job: you must hold a certificate of eligibility before you can apply for a Certificate of Insurance for any project. The Eligibility Risk Manager assesses your financial viability from the documents you provide and may come back with further questions. We handle the submission and follow-up for you, and keep you updated on where the application sits. If you would rather talk it through before starting, call us on 02 8075 0975.

What documents do I need for an HBCF eligibility application?

An HBCF eligibility application needs your completed and signed eligibility and profile change application form, plus supporting financial evidence. That means a recent balance sheet and profit and loss statement if you trade as a company or trust, or tax returns if you are a sole trader or partnership. You will also need a statement of personal assets and liabilities, and copies of rates notices for every property declared on that statement. The application form carries a checklist covering any further documentation required for your circumstances. Incomplete document sets are the most common reason an application stalls, so it is worth checking the list before you send. Send everything in one email and we will review it before it goes to the Eligibility Risk Manager.

How is an HBCF eligibility application assessed?

The Eligibility Risk Manager assesses four things: your financial performance, the equity you have exposed to the building operations, your technical capability, and your history as a builder. Your financial statements are the primary evidence, and the assessor may make further enquiries to clarify anything in them. Where a builder is assessed as high risk, the result may be conditions imposed on the eligibility rather than an outright approval, or the application may be declined. Assessment is a judgement about your capacity to complete the work you are taking on, not simply a check of turnover. We keep you updated on progress throughout, and where conditions are proposed we help you understand what they mean for the jobs you can take.

What happens once I am approved for HBCF eligibility?

Once the assessment is finalised, approved builders receive a certificate of eligibility together with a builder eligibility assessment report, which sets out the eligibility conditions placed on your business. Those conditions typically govern the types of construction you can undertake, the maximum contract price per work category, and the number and value of projects you may have under construction at any one time. With a certificate of eligibility in hand, you can then apply for a Certificate of Insurance for individual projects as you win them. That second step is the one that runs job by job, and it is where turnaround matters most, so we handle certificate requests as a standing process rather than a fresh enquiry each time.

How do I change my HBCF eligibility profile?

Changing your eligibility profile means going through the application process again. You would do this when your business needs to move beyond the conditions on your current eligibility, for example to take on a different type of construction such as a multi-unit development, to increase the number or combined value of projects you have under construction at any one time, or to lift the maximum contract price for a work category. It is worth starting the change before you need it rather than when a contract is already on the table, because the reassessment takes the same evidence and the same judgement as a first application. Tell us what you are planning to bid on and we will tell you whether your current profile covers it.

How often is my HBCF eligibility reviewed?

Eligibility is subject to ongoing review, and how often you are reviewed is set by the Eligibility Risk Manager when your underwriting assessment is completed, together with programmed periodic review requirements. The majority of small builders are granted an exemption from annual reviews. Separately, the Eligibility Risk Manager may undertake a special eligibility review at any time if it appears your circumstances have changed, and will reassess your financial viability to continue holding eligibility. This means a significant change in your financial position, your structure or your project load can trigger a review outside the normal cycle. Keeping your financial records current makes these reviews straightforward, and we will tell you what is likely to be asked for.

How quickly can HBW Solutions issue a Certificate of Insurance?

We typically issue Certificates of Insurance within 24 to 48 hours of receiving a complete request. Certificates are the step that holds up settlement and site starts, so the process is deliberately simple: send us one email with the job details and a dedicated client manager handles it from there, rather than you working through the portal yourself. Our team includes former underwriters, which means eligibility questions and borderline jobs get answered rather than bounced back. If a request is going to take longer than usual, because a document is missing or the job sits outside your current eligibility conditions, we tell you straight away rather than letting the deadline arrive. Call 02 8075 0975 or request a quote.