Under the Building Work Contractors Act 1995 (SA) and Regulations builders performing building work that requires development approval, and has a value of $12,000 or greater, are required to take out a building indemnity insurance (BII) policy on behalf of the homeowner for each and every contract they enter into.
A BII policy, which is issued in the name of the homeowner, protects against financial losses, up to a maximum amount of $80,000 for policies issued on or before 30 June 2017 and $150,000 for policies issued on or after 1 July 2017. In the event the builder dies, disappears or becomes insolvent before the completion of the building work or before defective work can be rectified. Claims for defective building work can be made up to five years after the building work has been finished.
Since 2013, in the absence of the availability of this cover in the private sector, the South Australian Government Financing Authority, through its insurance division, has underwritten BII through reinsurance agreements with insurers operating in the private sector.
The following table outlines the insurers that have held reinsurance agreements with SAFA and the periods the reinsurance agreements have been in place.
Start of reinsurance
End of reinsurance
QBE Insurance (Australia) Limited
1 July 2013
Calliden Insurance Limited
1 October 2013
31 October 2015
Great Lakes Australia
1 November 2015
30 June 2017
In 2015, Calliden Insurance Limited was purchased by Great Lakes Australia, a subsidiary of the international insurer Munich Re. Calliden Insurance Limited ceased to exist as an underwriting agency as of 31 October 2015. All builders and homeowners insured with Calliden Insurance Limited had immediate cover with Great Lakes Australia.
If you are a builder and you are seeking eligibility for BII you will need to contact your insurance broker who will arrange this on your behalf.
If you are a homeowner and you think you may have a claim you should contact your insurer in the first instance. The contact details for the insurers are detailed below.
Insurance Certificate Register
QBE Insurance (Australia) Limited has implemented an Insurance Certificate Register enabling homeowners and councils to confirm if a Certificate of Insurance has been issued on a building site in the last 10 years. This register can be used to match the details on your Certificate with the details on QBE's records.
Further information about BII can be found at sa.gov.au or through Consumer and Business Services, the building licence regulator for South Australia.