Commercial Insurance
The cover you're required to arrange for your client, and the cover you carry for yourself
In South Australia, building indemnity insurance is compulsory on domestic building work over $20,000 that needs development approval. You take out the policy; the homeowner is the one it protects. Construction work liability is the separate cover for your own business while the job is running.
What South Australia requires
Under the Building Work Contractors Act 1995 (SA), a builder must take out building indemnity insurance for the homeowner's benefit before starting domestic building work that requires development approval and exceeds the prescribed contract value. The certificate of insurance has to be given to the owner before work starts.
- Contract value threshold — $20,000. The threshold rose from $12,000 on 10 November 2025, when the regulations redefined "minor domestic building work".
- Maximum cover — $250,000, up from $150,000. Policies issued before the change retain the earlier limit.
- Penalty for not providing the certificate — Up to $20,000.
When the policy actually responds
Building indemnity is a last-resort cover, not a general defects warranty. It responds when the builder has died, disappeared or become insolvent and therefore can't put the work right themselves. While you're trading, a defect claim is dealt with between you and the owner — the policy doesn't step in. It also doesn't cover construction delays or contractual disputes.
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What it covers when it responds
Within the cover limit, and once a trigger event has occurred, the policy answers:
The effect is that a homeowner isn't left carrying the cost when the builder is no longer there to carry it.
- Structural defects — Major structural defects affecting the integrity and safety of the building — foundations, walls, floors and roofs.
- Non-structural defects — Defects in doors, windows, plumbing, electrical systems and finishes.
- Incomplete work — Where the project isn't completed on the contract terms.
- Cost of rectification — The cost of putting defects right or finishing unfinished work, including engaging new contractors and buying materials.
Cover for your own business on site
Construction work liability is designed to cover claims of property damage, bodily injury and other liabilities arising during a project, subject to policy terms.
Which of these you need, and at what limits, depends on your contracts and the work you take on — this is worth a conversation rather than a checkbox.
- Public liability — Third-party injury or property damage on or around the site.
- Professional indemnity — Claims arising from design or advice you provided.
- Product liability — Claims arising from materials or products you supplied.
From our clients
“We have used KeyInsure for our Builder Indemnity and Construction work. KeyInsure is very helpful and understands our needs. We are very satisfied with the service and quality advice we got from the team. Thanks.”
Auta Home GroupWho needs this cover
Building indemnity insurance is a legal requirement for licensed builders taking on domestic building work above the prescribed value in South Australia. Construction liability protects your own business while the job is running.
- Licensed builders undertaking domestic building work
- Renovation and extension specialists
- Owner-builders, where the regulations require it
- Contractors managing subcontractors on site
- Builders working under construction contracts with insurance clauses
- Building companies tendering for larger projects
What affects your premium
Builder’s cover is priced on your work, your history and your financial position.
Type and value of work
New homes, renovations and structural work are each rated differently.
Turnover and size
Annual revenue, number of staff and number of sites all feed into the premium.
Financial position
Building indemnity insurers assess the builder’s solvency because the policy responds if the builder cannot.
Limit of cover
A higher limit costs more. Contracts and site requirements often set the minimum you need.
Claims history
Past claims — yours and, in some cases, the industry’s — affect what insurers offer.
Licensing and experience
Years licensed, qualifications and safety systems all feed into the assessment.
Common questions
When do I need a building indemnity certificate?
Before starting domestic building work that requires development approval and exceeds the prescribed contract value. The certificate has to be given to the owner before work starts.
Who is protected by building indemnity insurance?
The homeowner. It responds if the builder dies, disappears or becomes insolvent and cannot complete or rectify the work. It is not a general defects warranty.
Does construction liability cover my subcontractors?
It covers your liability arising from the work, which can include work done by subcontractors. Subcontractors should hold their own cover as well, and contracts usually require it.
Is contract works insurance the same thing?
No. Contract works covers the physical works under construction against damage such as fire, storm or theft. Liability covers injury and damage to third parties. Many builders hold both.
Related cover
Ready when you are
General advice only. Consider the relevant PDS & TMD before acquiring any product.