Introduction
As a licensed builder or trade contractor you must have a certificate of eligibility before you can apply for home building compensation (HBC) cover.
The certificate of eligibility means that an eligibility risk manager has assessed that you are as entitled to obtain insurance from icare HBCF (home building compensation fund).
Eligibility for a certificate
To apply for a certificate of eligibility you need to have:
- a contractor licence for building, trade or specialist work
- an ABN/ACN.
Note: You do not need HBC cover if:
- you subcontract the work from another licensed contractor
- the contract price or market cost of labour and materials is less than $20,000, including GST.
How to apply for a certificate of eligibility
To apply for a certificate of eligibility you'll need to:
- Find an insurance broker distributor from icare HBCF’s list.
- Complete a builder eligibility application – PDF (your broker will help you with this).
- Gather the information your broker requests. This may include, but is not limited to:
- your personal and business financial details such as assets and liabilities
- your contractor licence details
- tax returns and/or profit and loss statements
- the likely number, type and value of proposed projects at any time.
Note: If you want to start doing more jobs or bigger jobs, you’ll need to apply to change your eligibility.
Your broker then:
- applies for the certificate for you
- updates you on the progress of your application
- tells you the outcome and gives you the certificate of eligibility.
What happens next
Eligibility risk manager
When assessing eligibility applications the eligibility risk manager takes into account the following criteria:
- financial performance
- equity exposed to the building operations
- technical capability
- claims history.
Download the HBCF Eligibility Manual – PDF for more detailed information.
Your certificate
Your certificate of eligibility will tell you:
- the maximum contract price for the types of jobs that have been approved
- the number and value of jobs that you can have open at the one time.
Note: If you're deemed to be a high risk your application may be refused, or if granted, may come with special conditions.
Where appropriate, other conditions may also be included such as:
- maintaining or increasing capital levels
- providing specified levels of financial security
- frequency of financial reporting.
Eligibility review process
Under HBC insurance guidelines, icare HBCF must not grant eligibility to a builder for a period greater than 3 years or less than 12 months.
Within that time frame you will be subject to eligibility reviews.
The frequency of your eligibility review is determined by 2 factors:
- the outcome of the eligibility risk manager's previous eligibility assessment
- HBCF programmed periodic review requirements.
You'll be notified of the frequency of your review.
The eligibility risk manager may also undertake a special eligibility review if it appears a builder’s circumstances have changed.