Councils and Accredited Professionals (certifiers) have a vital role in the administration of Building Indemnity Insurance (BII). They are the ‘gatekeepers’ and are charged with ensuring that BII is in place to protect homeowners.

Underinsurance

Consumer and Business Services (CBS) has found instances of builders undertaking work without BII, including some with forged BII certificates. Councils and certifiers are encouraged to check whether a policy is in place for a particular address at QBE Certificate Register. A new private insurer, Assetinsure, can also issue construction warranty insurance (BII) in South Australia for domestic construction projects. Certificate details can be verified online at Assetinsure Certificate Register.

CBS has also seen instances where builders have falsely declared project values under the $12,000/$20,000 minimum project value to avoid BII. You should question any obvious instances of false project values.

If you become aware of a person building without a building work contractor’s licence or a building work contractor building without BII, please report this to CBS.

You can do this via the CBS website via their ‘Report or make a complaint about a business or product’ online form.

Owner Builder Issues

There have been instances of projects being undertaken with owner builder status when they do not meet the criteria. Councils or certifiers may wish to ask people applying for development approval as an owner builder whether they are using a “project manager” or building work supervisor and what their role will be. Councils or certifiers could also ask whether they have a builder involved who has asked that they apply for approval as an owner builder. For more information, please visit the Owner Builders information page.

A person who sells or rents two or more buildings within five years, that they have built or improved, is considered to be a building work contractor (unless they can prove otherwise). They need to be licensed as a builder and take out BII. It is unlikely that a person seeking to build multiple properties is a genuine “owner builder” for licensing and BII purposes.

If a person has engaged a builder to supervise or project manage work, the hired person may be acting as a building work contractor and so would require BII for the whole project. A person who organises or arranges for the performance of building work as part of their business is considered to be acting as a building work contractor.

For example:

• If a project manager or supervisor arranges trade contractors and directs them, this is likely to be “performing building work”. This applies irrespective of whether the owner pays the trade contractors and suppliers direct.
• If a project manager or supervisor only assesses the work and provides advice to the owner, who organises and directs the trade contractors, this is not likely to be “performing building work”.