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Short answer: on residential jobs above a set value, the builder must arrange home warranty insurance for the homeowner before taking a deposit or starting work. The thresholds differ a lot between states: over $20,000 in NSW, over $16,000 in Victoria and over $3,300 in Queensland. The cover protects the homeowner as a last resort, mainly if the builder becomes insolvent, dies or disappears.

Facts checked against NSW, Victorian and Queensland Government sources on 14 October 2026.

At a glance

NSW: Home Building Compensation (HBC)

• Required for residential building work over $20,000, including GST, unless an exemption applies. It covers new homes and apartment buildings up to three storeys, renovations of home buildings regardless of height, and swimming pool work.
• The builder must give the homeowner a Certificate of Insurance before work starts or any money is paid under the contract, including a deposit.
• It protects the homeowner if the builder becomes insolvent, dies, disappears, or has their licence suspended for failing to compensate a homeowner. icare lists cover periods of up to 6 years for major defects, 2 years for other defects, and 12 months for incomplete work.
• Check it: the free HBC Check on Service NSW lets you search by certificate number, contractor name or licence number, company name or property address. It shows the certificate issue date, the insured address, the principal contractor and any claims paid.

Victoria: Domestic Building Insurance (DBI)

• Required for domestic building work over $16,000. The builder takes it out for the client.
• The builder must give the client a copy of the policy and a certificate of currency before taking a deposit or any other money.
• It covers the client if the builder dies, becomes insolvent or disappears, with costs up to $300,000 to fix structural defects for six years and non-structural defects for two years.

Queensland: Home Warranty Scheme

• Required for insurable residential construction work over $3,300, counting labour, materials and GST.
• The principal contractor who contracts with the homeowner collects the premium and pays it to the QBCC before work starts, or within 10 business days of signing the contract, whichever comes first.
• Using an unlicensed contractor can leave the work outside the scheme, so check the QBCC licence too.

What homeowners should do before paying a deposit

1. Ask for the certificate (or policy and certificate of currency in Victoria).
2. Check the details: your name, the property address, the contract price and a description of the work.
3. Check the builder's licence or registration in your state: NSW, Victoria or Queensland.
4. Keep a copy with your contract.

For builders: keep the paperwork with the job

Home warranty certificates are easy to lose in an inbox. In OpSpot, each project has its own place for the home building compensation (HBC) certificate, and contracts and pricing can sit in Sensitive Files, which subcontractors never see. See Documents and file permissions.

FAQ

Does home warranty insurance cover a builder who simply does poor work? It is a last-resort cover. It mainly responds when the builder can't fix the work because they are insolvent, have died or disappeared (and, in NSW, when their licence is suspended for failing to compensate a homeowner).

Is it needed for commercial fit-outs? These schemes cover residential work. A commercial office fit-out isn't residential building work.

Who pays the premium? The cost is usually passed on to the homeowner in the contract price. In Queensland the homeowner pays and the contractor collects and remits the premium.

My job is just under the threshold. Do I still need insurance? Not under these schemes, but the licensing rules may still apply, and a written contract is always worth having.

Sources

• icare: What is icare HBCF and why do I need it? · Do I need HBCF?
• Service NSW: Use the Home Building Compensation (HBC) Check
• Consumer Affairs Victoria: Domestic building insurance
• QBCC: Who pays home warranty and when