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Insurance

Building insurance requirements

The VBA requires evidence that a person holds the required insurance or is eligible to purchase the required insurance (in some cases) before we can grant or renew a building registration.

There are three types of insurance for registered building practitioners:

  • Domestic building insurance
  • Professional indemnity insurance
  • Public liability insurance

Domestic building insurance

If you undertake domestic building work worth more than $16,000, you need domestic building insurance.

What is domestic building insurance

Before taking a deposit or any money, building practitioners must provide their client with both a copy of the policy and a certificate of currency covering the client's property.

Domestic building insurance covers the client if, before work is complete, the practitioner dies, is declared insolvent or disappears. It covers:

  • costs up to $300,000 to fix structural defects for six years and
  • non-structural defects for two years.

In all other cases, it is up to the building practitioner to fix or complete works, or to pay any costs awarded.

Providing domestic building insurance to the VBA

Domestic builders must provide evidence that they are eligible to purchase domestic building insurance.  This is usually in the form of a 'Letter of Eligibility’ (LOE) to purchase domestic building insurance.

Your LOE must contain the following details:

  • The name of the person the LOE was issued to (where the registration is held by a company, it must detail the name of the company)
  • An account or policy number
  • The name of the insurance provider
  • The type of insurance provided
  • A date of issue of no more than 12 months

To learn more about domestic building insurance requirements, refer to Variations to the Domestic Building Insurance Ministerial Order.

Professional indemnity insurance

You need professional indemnity (PI) insurance for registration in any of the following building practitioner categories:

  • Building surveyor
  • Building inspector
  • Quantity surveyor
  • Building Designer
  • Professional engineers applying for or holding endorsement to work in the building industry as part of a registration application via the Business Licensing Authority (BLA)

What is PI insurance

PI insurance covers the practitioner against legal liability resulting from any claim made during the period of insurance.

Providing your PI insurance to the VBA

When providing your PI Insurance to the VBA it must contain:

  • The name of the person the insurance was issued to (where the registration is held by a company, it must detail the name of the company)
  • The policy number
  • The name of the insurance provider
  • The type of insurance provided
  • Be titled ‘Certificate of Currency’, ‘Confirmation of Insurance’ or ‘Certificate of Insurance’
  • State the minimum limit of indemnity of:
  • at least $1,500,000 or 
  • $1,000,000 with costs exclusive or costs in addition

Policy schedules and invoices are not accepted as proof that you hold the required PI insurance.

The VBA reminds industry professionals to disclose to their insurer any work related to external wall cladding products prior to renewing their PI insurance policy.

To learn more, refer to the Building Practitioners' Insurance Ministerial Order (PDF, 501.84 KB) (updated January 2020).

Insurance exclusions

Insurance policies must not exclude liability for loss or damage arising out of building work as defined in the Building Act 1993 except where this relates to the classes of Building Surveyors or Building Inspectors.

Policies for Building Surveyors or Building Inspectors only may contain a provision excluding liability for loss or damage arising out of building work as defined in the Building Act 1993 where the claim directly relates to or is connected with certain external cladding wall products.

To learn more, about cladding exclusions, refer to the Building Practitioners' Insurance Ministerial Order. (PDF, 501.84 KB)

Professional engineers

Professional engineers registered with the BLA must maintain their PI insurance information via the BLA’s myCAV system. The VBA will review the submitted information on lodgement. For more information, visit the Maintain your registration and endorsement page on the Consumer Affairs Victoria website.

Public liability insurance

You need public liability insurance for registration in any of the following building practitioner categories:

  • Builder – demolisher
  • Erector or supervisor (temporary structures).

What is public liability insurance

Public liability insurance covers the building practitioner against legal liability resulting from any claim made during the period of insurance.

Providing your public liability insurance to the VBA

When providing your public liability insurance to the VBA as proof that you hold the required insurance, it must contain:

  • The name of the person the insurance was issued to (where the registration is held by a company, it must detail the name of the company)
  • The policy number
  • The name of the insurance provider
  • The type of insurance provided
  • Be titled ‘Certificate of Currency’, ‘Confirmation of Insurance’ or ‘Certificate of Insurance’
  • State the minimum limit of indemnity of $5,000,000 for practitioners holding Demolisher (low rise), Demolisher (medium rise) and Erector or supervisor (temporary structures)
  • State the minimum limit of indemnity of $10,000,000 for practitioners holding Demolisher (unlimited)

Policy schedules and invoices are not accepted as proof that you hold the required PI insurance.

To learn more, refer to the Building Practitioners' Insurance Ministerial Order (PDF, 501.84 KB) (updated January 2020).

Covered by your employer’s or company’s insurance

If the insurance you are providing to the VBA is your employers insurance and you are not named in the insurance documentation, you must provide a letter from your employer confirming your employment and coverage under their insurance policy.

If you are a director of a company and not named in the insurance documentation, please provide an ASIC extract to verify your role as director of that company.

What happens if I am not covered by the required insurance?

If we learn that you are no longer covered by the required insurance, we must suspend your VBA registration.

The effects of suspension include:

  • you will be unable to working as a registered building practitioner under your registration for the duration of suspension
  • any building permits issued in your name as the builder are suspended (if issued after 1 July 2018)
  • you will be required to give notice of the suspension to any person who has a building contract with you
  • if you are the director of a company that is registered as a building practitioner, the registration of the company may also be suspended
  • offences apply for breaches that occur during the suspension period

Professional engineers holding endorsement to work in the building industry

Professional engineers who hold endorsement to work in the building industry through the BLA will have their endorsement suspended if they are no longer covered by the required insurance.  You will not be permitted to provide professional engineering services in the building industry while your endorsement is in suspension.