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Before licensed builders and trade contractors can contract to work on certain residential building jobs, they need to have home building compensation (HBC) cover.

To be eligible to apply for HBC cover (formerly known as home warranty insurance) you'll need to have: 

  • a contractor licence for building, trade or specialist work
  • an ABN/ACN.

HBC cover protects your customer if you cannot complete building work or honour your warranty obligations.

Where HBC cover is required

You must hold HBC cover before you start any work or take any money (including a deposit) where the:

  • work is contracted with a homeowner, owner-builder or developer
  • contract price or market cost of labour and materials is over $20,000, including GST
  • project is not exempt from insurance.

Note: You do not need HBC cover if you subcontract the work from another licensed contractor.

Projects that typically require HBC cover include:

  • alterations or renovations of residential buildings of any height
  • construction of a: 
    • house
    • duplex or triplex
    • low-rise residential multi-unit building (up to 3 storeys high)
    • structure associated with a home, such as a backyard swimming pool, spa, garage or outbuilding.

Use the HBC Assist tool to check if a job needs HBC cover. 

Jobs with HBC cover are listed on HBC check. This is a free public register that anyone can access to verify that a builder or tradesperson has valid cover for the residential work they're doing in NSW.

Applying for HBC cover

To apply for HBC cover you’ll need to:

  1. Find an insurance broker distributor from icare HBCF’s list.
  2. Get a certificate of eligibility from your broker distributor. 
  3. Submit your application for HBC cover through your broker distributor.

You need to take out HBC cover for each job and provide the certificate of insurance to your client before you take a deposit or start work. It is an offence to not do this. 

HBC cover claims

Your customer can make a claim on your HBC cover if you're unable to complete building work or honour your warranty obligations, because:

  • you've had your licence suspended for failing to comply with a court or tribunal order to compensate them, or
  • you die, disappear or become insolvent.

The State Insurance Regulatory Authority (SIRA) regulates the HBC scheme, and icare HBCF is the only insurer that offers HBC cover.

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