Accidents are called accidents for a reason – you can’t preempt them; however, you can be prepared just in case. Making sure that you and your project are covered by insurance at all times is integral to any building works. So, what kind of insurance do you need?
When building or renovating your dream home in Victoria, your builder may be covered by two kinds of insurance – either Home Owners Warranty Insuranceof Construction Works Insurance.Your builder should also be able to provide evidence to back up this claim. Note, that if you’re engaging in an unconditional loan, your bank may also need copies of these insurance policies to approve your loan.
In this blog, we’ll explain more about each type of insurance and discuss which is the most suitable for your home build.
Home Owners Warranty Insurance
This cover, also known as Domestic Building Insurance (DBI) essentially protects you in the event that your project cannot be completed or has defective works that cannot be rectified. This applies when your builder dies, disappears or becomes insolvent.
In Victoria, it is your builder’s responsibility to purchase DBI on your behalf for any project where the contract price is over $16,000. Before they can do so, they must first be given approval by the Victorian Managed Insurance Authority (VMIA).
It is important to note that your builder musthave Domestic Building Insurance for the project before they can request any money from you. Once they have obtained DBI, this certificate will be used as part of the Building Permit application.
Construction Works Insurance
Construction Works or Contract Works Insurance covers licensed builders, trades and sub-contractors’ responsibility to insure against loss or damage to the build project, along with legal and contractual obligations in relation to the construction.
Essentially this cover protects the insured works in respect to accidental damage like fire, theft, water damage, flood, malicious damage, storm and cyclone, landslide and earthquake. Construction Works Insurance is either taken out to cover a specific construction project or annually to cover a number of projects.
The second part of Construction Works Insurance is Public and Products Liability Insurance, which covers you for third-party property damage or third-party bodily injury arising from negligence. You should always ask to see a certificate of currency for public liability insurance to ensure your builder can meet any legal claims for injury or damage that may be caused.
To find out more about building insurance or to determine which type of insurance is right for your project, get in touch with the team at Glenco Building Group today.