Who Needs HBCF Insurance in NSW?
HBCF insurance must be arranged by the principal contractor for many NSW residential building projects before work starts or any payment is taken. The requirement is tied to the type and value of the work, the contracting arrangement and any applicable exemption.
This article answers the specific “who needs it?” question and links back to our broader HBCF insurance guide for builders.
For a related check, read how to check an HBCF certificate of insurance. You can also discuss your cover through ABS’s home warranty insurance service.
Speak with a construction insurance specialist
Discuss your building business, current eligibility or the insurance requirements for your next project.
Request an insurance review
Ask ABS to review your circumstances and explain the next practical steps.
When is HBCF insurance required?
SIRA’s current guidance states that a building business must obtain HBC insurance for each home building project over $20,000, including GST, unless an exemption applies. Cover must be obtained before starting work or taking any payment, including a deposit.
The principal contractor is generally responsible. Employees and subcontractors working for a principal contractor generally do not arrange HBCF for that same work, although they may require their own public liability, tools, vehicle or other business insurance.
The $20,000 Threshold and Residential Building Work
The threshold relates to the total value of the residential building project, including GST—not just one trade package or progress claim. New homes, alterations, additions and renovations may fall within the scheme when the legal requirements are met.
Do not split a project artificially or rely on an informal description of the work. Confirm the actual contract value, scope, contracting entity and whether the work is covered residential building work. The SIRA Home Building Compensation information and HBC Assist tool provide current government guidance.
Projects below the insurance threshold may still require a written building contract and other insurance. The HBCF threshold is not a general exemption from licensing, contract or insurance obligations.
Principal Contractors, Subcontractors and Spec Builders
The principal contractor that contracts with the homeowner or developer generally carries the HBCF obligation. SIRA explains that employees and subcontractors working for a contractor who must insure the project are generally exempt from arranging HBCF for that work.
That does not mean subcontractors are automatically protected for every risk. Their contracts may require separate public liability, workers compensation where applicable, vehicle, tools, plant or professional indemnity cover.
A building business constructing a home on land it owns—a specification build—must generally obtain HBC insurance before starting the work. The certificate then forms part of the later sale documentation where required.
Timing, Certificates and Exemptions
If HBCF is required, arrange the project certificate before starting work or accepting any money under the contract, including the deposit. Provide the certificate to the homeowner, developer or owner-builder before those events.
Some work or contracting situations may be exempt. Exemptions should never be assumed. SIRA’s exemption guidance explains that special exemptions are limited and must be obtained before building work commences.
Where the facts are uncertain, pause and verify the position with the relevant regulator and an appropriately experienced adviser.
Frequently Asked Questions About Who Needs HBCF
Is HBCF required for every NSW building job?
No. It generally applies to covered residential building work over $20,000 including GST, unless an exemption applies. The project facts and contracting arrangement must be checked.
Does a subcontractor need HBCF for work under a builder?
Generally, the principal contractor is responsible for the project’s HBCF cover. A subcontractor may still need other insurance and should check the subcontract.
Can a builder take a deposit before obtaining the certificate?
SIRA states that required HBC insurance must be obtained before the builder starts work or takes any payment, including a deposit.
Does a spec home need HBCF?
A building business constructing homes on its own land generally needs project cover before starting work and must deal with the certificate when the property is sold.
Is the threshold calculated before or after GST?
The current NSW guidance states the project threshold is over $20,000 including GST.
Who should confirm whether an exemption applies?
Check current SIRA guidance and obtain appropriate advice. Do not rely on an assumption or an informal statement where the project is close to commencement.
Confirm the HBCF Position Before the Contract Starts
ABS Insurance Brokers assists NSW builders with HBCF eligibility, project certificates and related construction insurance. Contact us early so the insurance process can be considered before deposits and commencement dates become urgent.
Important information: This article provides general information only and does not consider your objectives, financial situation or needs. Insurance cover is subject to policy terms, conditions, limits and exclusions. Legislative and scheme requirements can change. Obtain advice appropriate to your circumstances and verify current requirements with the relevant government authority.
