Do owner-builders need contract works insurance?

Yes. As an owner-builder, you are the project manager and take on the same responsibilities as a licensed builder for insuring the works. Your home and contents insurance will not cover a construction project. Contract works insurance protects your investment against fire, storm, theft and liability claims during the build.

How is owner-builder insurance different from a builder's policy?

Owner-builder policies are typically single-project policies covering one specific build. Licensed builders usually hold annual turnover policies covering multiple projects. Owner-builder policies may have higher excesses and some insurers require evidence of an owner-builder permit before issuing cover.

Does owner-builder contract works insurance cover subcontractors?

The public liability section of your contract works policy typically extends to cover claims arising from the work of subcontractors engaged on the project. However, each subcontractor should also carry their own public liability and, where applicable, professional indemnity insurance. As the owner-builder, you should request certificates of currency from all tradespeople before they commence work.

Owner Builder Contract Works Insurance

Q: What does an owner-builder need to get contract works insurance?

You typically need an owner-builder permit (issued by your state building authority), approved building plans, a project budget or estimated contract value, and details of the licensed tradespeople you will engage. Some insurers also require the project to be supervised by a registered building practitioner.

Q: How much does owner-builder contract works insurance cost?

For a typical owner-builder residential project valued between $200,000 and $600,000, contract works insurance premiums generally range from $500 to $2,000 plus government charges. The exact cost depends on the project value, location, construction type and natural hazard exposure.

Owner-builder contract works insurance is a single-project policy designed for individuals who hold an owner-builder permit and are managing their own residential construction project. As an owner-builder, you take on the same construction risks as a licensed builder — and your standard home and contents insurance will not cover a building site.

Whether you are building a new home from scratch, undertaking a major renovation or managing a knockdown-rebuild, contract works insurance protects your financial investment in the project against physical damage, theft and third-party liability claims during the construction period.

Why Owner-Builders Need Contract Works Insurance

When you take on an owner-builder project, you assume the role of the principal contractor. This means you are responsible for:

The physical works — materials, partially completed structures and temporary works on site are your responsibility until the project is complete
Site safety and liability — if a visitor, neighbour or tradesperson is injured on your site, or if construction activity damages a neighbour's property, you may be held liable
Coordinating tradespeople — while each licensed tradesperson should carry their own insurance, gaps can exist, particularly regarding the works themselves

A real scenario illustrates the risk: An owner-builder in western Sydney had a partially completed timber-frame home destroyed by a severe storm. The framing, roofing materials and site works — valued at over $120,000 — were a total loss. Without contract works insurance, that cost would have come entirely out of the owner's pocket.

Important: Your existing home and contents insurance policy will not cover a construction site. The moment you begin building works, the property transitions from a "home" risk to a "construction" risk, which requires a specific contract works policy.

What Does Owner-Builder Insurance Cover?

An owner-builder contract works policy provides the same core coverage as a standard contract works insurance policy:

Material Damage

The building works during construction
Building materials on site and in transit
Temporary works (formwork, scaffolding, hoarding)
Existing structures being renovated (when declared)
Principal-supplied materials

Legal Liability

Public liability for injury to visitors or damage to neighbouring property
Liability arising from the work of subcontractors engaged on the project

What Is Typically Not Included for Owner-Builders

Products liability (this is typically only available on annual policies for licensed builders)
Advance loss of profits or rental income (though some policies offer this as an extension)
Tools belonging to the owner-builder (though tradespeople's tools may have limited cover)

How Owner-Builder Policies Differ from Builder Policies

Feature	Owner-Builder Policy	Licensed Builder Policy
Policy type	Single project	Annual turnover or single project
Products liability	Usually not included	Included on annual policies
Requirements	Owner-builder permit, approved plans	Builder's licence, business details
Excess	May be higher	Negotiable based on experience
Premium basis	Contract value of the project	Annual turnover or contract value
Insurer appetite	Fewer insurers offer this	Broadly available

State-by-State Owner-Builder Requirements

Owner-builder regulations vary by state. Here is a summary of the key insurance-related requirements:

New South Wales

In NSW, owner-builders must obtain an owner-builder permit from NSW Fair Trading for residential work over $10,000. Home building compensation cover is no longer available for work done by an owner-builder. However, each licensed contractor engaged by the owner-builder must provide home building compensation insurance for their portion of the work if it exceeds $20,000. The owner-builder should arrange separate contract works insurance for the project.

Victoria

Victorian owner-builders must register with the Victorian Building Authority (VBA). For domestic building work over $16,000, domestic building insurance is required. Owner-builders should also arrange contract works insurance to protect against physical damage and liability during construction.

Queensland

In Queensland, the QBCC requires owner-builders to obtain an owner-builder permit. Queensland Home Warranty Scheme cover is mandatory for residential work over $3,300. Contract works insurance is separate from home warranty and should be arranged independently to cover the construction period.

Other States

South Australia, Western Australia, Tasmania, the NT and ACT each have their own owner-builder permit requirements. In all cases, contract works insurance is strongly recommended and often required by lending institutions financing the build.

Common Pitfalls for Owner-Builders

Assuming home insurance covers the build — It does not. You need a separate contract works policy from the day construction begins.
Under-insuring the project — Declare the full value of the works including all materials, labour and GST. Under-insurance can result in reduced claim payouts.
Not declaring existing structures — If you are renovating or extending, the existing building must be specifically noted on the policy to be covered.
Not checking subcontractor insurance — Request certificates of currency from every tradesperson before they start work. Confirm they hold public liability and, where required, home warranty insurance.
Leaving the site unsecured — Theft and vandalism are common on building sites. Invest in secure fencing, locked storage and consider CCTV to both protect your property and demonstrate good risk management to insurers.
Forgetting to extend the policy — If your project runs over the original construction period, contact your broker before the policy expires to arrange an extension. A lapsed policy means no cover.

How Much Does Owner-Builder Insurance Cost?

For a typical owner-builder residential project, contract works insurance premiums generally range from a few hundred to a couple of thousand dollars, depending on the project value and risk factors. Read our detailed cost guide for more information on pricing factors and typical ranges.

Key factors affecting the cost for owner-builders include the total project value, location (particularly natural hazard exposure), construction type (timber frame, brick veneer, concrete) and whether existing structures are being covered.

Owner-Builder Insurance FAQ

Yes. As an owner-builder you take on the same responsibilities as a licensed builder for insuring the works. Your home insurance will not cover a construction site. Contract works insurance protects your investment against fire, storm, theft and liability claims during the build.

Owner-builder policies are single-project policies covering one build. Licensed builders usually hold annual turnover policies. Owner-builder policies may have higher excesses, fewer insurers offer them, and products liability is usually not included.

You typically need an owner-builder permit from your state building authority, approved building plans, a project budget or estimated contract value, and details of the licensed tradespeople you will engage. Some insurers also require a registered building practitioner to supervise the project.

For a typical project valued between $200,000 and $600,000, premiums generally range from $500 to $2,000 plus government charges. The exact cost depends on project value, location, construction type and natural hazard exposure. See our full cost guide.

The public liability section typically extends to claims arising from subcontractor work on the project. However, each subcontractor should carry their own insurance. Always request certificates of currency before they commence work on your site.