Other than the Home Warranty Insurance, is there any other type of insurance which a builder must legally get for themselves?
Workers compensation - only If they employ others Public Liability - If they want coverage for injury or damage to others in relation to their activities Contractor's All Risk/Works - covers damage to the works All of these are optional but highly recommended as part of their risk management profile.
NSW Home Owners Warranty jumps significantly in a month (1 July) and then again on 1 January. For a decent builder it will have roughly doubled from [for townhouse development] 2% 2 years ago and will be ~4.00% on 1 January. Yet the Govt is so incompetent they have lost about $600m in the past few years with dodgy builders. Premium Increases iCare HBCF premium changes effective 1 August 2019 & FAQ's | HIAIS $600m in losses to NSW https://www.smh.com.au/national/nsw...d-against-dodgy-builders-20191205-p53h6n.html It's unfair that the Govt does such a poor job insuring/regulating useless builders/dodgy corporations. New developers get caught out and lose capital / new buyers have to pay more.
I'm undergoing this process now, I'm surprised they are doing such a bad job of it. For me they have stopped nothing short of bend over, pull out the magnifying glass, spread, whats that dot there? Why don't they just abolish this insurance scheme and let the market take care of itself, more than likely as with the commercial construction sector an industry of project managers will boom to protect their clients interests, this is much more effective than an insurance policy - in my opinion. An insurance policy is only effective when the damage is already done - which is too late and reactive.
They told us that we had to sign a deed of indemnity in favour of the insurer for 10% of the building contract (we are the developer not the builder) and would be joint and severally responsible with the builder for any claims - ie if builder was bankrupt they would come after us personally. I told them to get stuffed and got our lawyer to give an opinion before they rolled over (Dec last year).
@SteakOnThePlate - that's not insurance, it's legislated extortion. Even for the builder, there's no incentive to hold any assets which there could be a claim against them.
Were you and the builder operating under the same entity or separate entities? If the same entity I can see them trying to have a go at this, but if separate entities I would have done the same and told them where to put their suggestion - good to hear it worked out in your favour either way. It's a useless reactive system and is not a preventative system of control.
That is hilarious, thanks for the detailed insight and good to know you didn't let them muscle in. It's really reflective of an institution trying to step outside of the 'systemic' intention, aka trying to throw their weight around. Half my career has been spent in contracting for commercial and government private clients in the $1 mill to $30 mill range (I have been working for big builders not my own company). The systems in place are much more effective than the low end residential space, while I have now started my own business on a much smaller scale, I am getting to experience this regulation nightmare first hand. I can see them legislating something in the future to bring developers into the fold, I don't agree with that but I won't be surprised. Government trying to repair a dodgy tyre rather than replace it.
