What is HBCF Insurance?

HBCF Insurance (previously known as Home Warranty Insurance or Builders Warranty Insurance) provides a safety net for homeowners to compensate for losses due to a builder not being able to honour their building commitments.

Under the HBCF scheme, if residential construction or renovation projects exceed $20,000, it is compulsory for licenced builders and contractors to obtain a home warranty certificate of insurance before taking any deposit and beginning building work.

As a builder you are legally required to provide proof of HBCF cover to the homeowner or developer you are working for prior to taking any deposit or commencing any works to the site.

What does HBCF cover?

HBCF Insurance compensates homeowners for losses arising from defective and incomplete work where the builder or contractor:

• Becomes insolvent
• Dies
• Disappears
• Has their building licence suspended where they have failed to comply with NSW Civil and Administrative Tribunal or Court order to pay the homeowner money.

An HBCF policy typically provides cover for:

• Failure to commence work - loss of deposit under the building contract, claimable for up to 12 months from the failure to commence
• Failure to complete work - up to 20% of the contract price (including any variations), claimable for up to 12 months from the cessation of work
• Major defects - claimable for a period of up to 6 years from completion of the work. If the homeowner becomes aware of the defects in the last 6 months of the period of insurance, they may claim within 6 months of awareness of the defect(s).
• For non-major defects - the cost of repair, claimable for a period of up to 2 years from completion of the work. If the homeowner becomes aware of the defects in the last 6 months of the period of insurance, they may claim within 6 months of awareness of the defect(s).

The policy provides maximum cover per dwelling of:

• $300,000, if issued before 1 February 2012
• $340,000 for all other policies

The cover extends to subsequent purchasers of the property (as long as the policy has not been exhausted by a prior claim).

Full terms and conditions are as set out in the policy applicable to an individual property.

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How Coverforce can help

Coverforce has a dedicated team of insurance brokers and administration staff that can assist builders and contractors with the following tasks:

• Lodgement of a new application for eligibility under the HBCF Insurance Scheme
• Notification of eligibility reviews and subsequent outcomes. We can also guide you on how to respond to any outcomes from your application.
• Liaise directly with icare on your behalf to save you time.
• Eligibility profile changes such as changes to the type(s) of construction you do or to increase your job limit.
• Submitting an application for a Certificate of Insurance (COI) within 2 hours of receipt of a completion application.
• Lodgemet of a notification of a completed project
• As an approved distributor of HBCF Insurance, our team can also assist other insurance brokers to obtain HBCF Insurance on behalf of their builder and contractor clients.

For further assistance, please don't hesitate to contact your local HBCF service team.