What the hbcf covers
A Certificate of Insurance issued by icare hbcf compensates homeowners for losses arising from defective and incomplete work where the builder or tradesperson:
- becomes insolvent
- disappears, or
- has their building licence suspended by NSW Fair Trading due to non-compliance with a money order made in favour of the homeowner by the NSW Civil and Administrative Tribunal or a court.
A hbcf policy provides cover for:
- Failure to commence work: loss of deposit under the building contract, claimable for up to 12 months from the failure to commence.
- Failure to complete work: up to 20% of the contract price (including any variations), claimable for up to 12 months from the cessation of work.
- Major defects: the cost of repair, claimable for a period of up to 6 years from completion of the work. If the homeowner becomes aware of the defects in the last 6 months of the period of insurance, they may claim within 6 months of awareness of the defect(s).
- For non-major defects: the cost of repair, claimable for a period of up to 2 years from completion of the work. If the homeowner becomes aware of the defects in the last 6 months of the period of insurance, they may claim within 6 months of awareness of the defect(s).
When a homeowner becomes aware of a loss becomes during the period of insurance but a claim cannot be made because the builder can still be pursued, a claim can be made after the period of insurance if the loss suffered is properly notified to icare hbcf during the period of insurance and the homeowner diligently pursues the enforcement of their statutory warranty rights up to the point where a trigger event occurs under the policy and the homeowner makes a claim.
The policy provides a maximum cover per dwelling of:
$300,000, if issued before 1 February 2012; and
$340,000 for all other policies.
The cover extends to subsequent purchasers of the property (as long as the policy has not been exhausted by a prior claim).
Full terms and conditions are as set out in the policy applicable to an individual property.
What is the Eligibility Process
To apply for eligibility for NSW HBCF Insurance, complete and sign this application form (link form) and return to firstname.lastname@example.org with all relevant supplementary documents attached.
Documents we will need include:
- your completed eligibility & profile change application form
- a recent balance sheet, profit and loss statement (for company and trust) or tax returns (for sole trader and partnership)
- a statement of personal assets and liabilities
- copies of rates notices for all properties declared on the statement of personal assets and liabilities
- refer to the check-list in the application form for any other required supporting documentation.
The Eligibility Risk Manager uses your financial statements to assess your financial viability. They may make further enquiries to seek clarification of issues associated with your application.
What happens next?
We will keep you updated on the progress of your application. When assessing your eligibility application the Eligibility Risk Manager takes into account the following criteria:
- financial performance
- equity exposed to the building operations
- technical capability
Where builders are assessed as a “high risk”, this may result in conditions being imposed or the application being declined.
Once the assessment has been finalised, approved builders are provided with a certificate of eligibility and builder eligibility assessment report which summarises the eligibility conditions placed upon a builder.
Once you have received a certificate of eligibility, you will be able to apply for a certificate of insurance for individual projects.
If you want to change your eligibility profile you will need to undergo the application process again.
You may, for example want your business to take on different types of construction such as a multi-unit development or you may wish to increase the number and/or value of projects that you have under construction at any given time or to increase the maximum contract price for a work category.
Reviewing your eligibility
On an ongoing basis, eligibility is subject to review. How often you may be reviewed is determined by the Eligibility Risk Manager on completion of the underwriting assessment, and by our programmed periodic review requirements.
The majority of small builders are granted an exemption from annual reviews.
The Eligibility Risk Manager may also undertake a special eligibility review if it appears a builder’s circumstances have changed. The Eligibility Risk Manager will assess the financial viability of the builder to continue to hold eligibility.