Insurance for building and plumbing work
Homeowners and renovators are protected from faulty building and plumbing work by insurance held by the builder or plumber.
Domestic building insurance
Domestic building insurance (DBI) is provided by a builder when the cost of building work under the contract with the builder is more than $16,000 (including labour and material costs). DBI will cover costs up to $300,000 to fix structural defects for six years, and non-structural defects for two years.
DBI provides cover to homeowners for incomplete or defective building works. A claim against this insurance can only be made if the builder dies, goes bankrupt or otherwise cannot be found. In some circumstances, for DBI policies issued after 1 July 2015, you can make a claim if your builder has failed to comply with a tribunal or court order. For more information, visit the Domestic Building Insurance section of the Victorian Managed Insurance Authority's website.
DBI exception – multi-storey buildings
If you own or are buying an apartment in a multi-storey residential building, you should be aware there are exceptions to the DBI requirements for these types of buildings. In general, DBI is not required for multi-storey residential buildings containing more than three storeys of accommodation. Please note: an entrance foyer and storage area will define a storey as accommodation, even if the remainder of the storey is for carparking.
For more information, see the Multi-Storey Residential Buildings - Warranty Insurance Exception Practice Note.
As a consumer, using an appropriately licensed plumber to carry out your work offers you protection because they have the required level of insurance to cover any defective work.
Licensed plumbers are required by law to obtain insurance before being licensed by the VBA.
Plumbing work covered by insurance
All licensed plumbers must be covered by insurance when carrying out plumbing work that requires a compliance certificate. Work that requires a compliance certificate is:
- any plumbing work that has a total value of $750 or more, including labour, materials, appliances and fixtures, regardless of who purchased them
- all work carried out on below ground sanitary drains
- all work involving the installation, relocation, replacement or conversion of any gas-using appliance
- all work involving the installation, modification or relocation of consumer gas piping
- all work involving the construction, installation, relocation, alteration or replacement of cooling towers.
The required insurance coverage includes:
- rectifying defective plumbing work that does not comply with plumbing standards
- trade practices liability
- consequential loss and non-completion. For example, if you suffer a loss because the work was not completed due to the plumber dying or having their licence suspended, or you ended the contract because the licensed plumber wrongfully refused to complete the work
- public liability, where the work carried out results in personal injury or damage to property.
Period of insurance coverage
For rectifying defective work and consequential loss and non-completion of work, the period of insurance coverage is six years from the date the work was completed or from the date the licensed plumber provided the consumer with a compliance certificate for the work.
The insurance continues for a six-year period even if the plumber ceases to be licensed or does not renew their policy during this period.
Public liability insurance is also included for six years from the date the work was completed or from the date the licensed plumber provided the consumer with the compliance certificate for the work.
Limits of required insurance coverage
There are limits on how much can be paid out under the insurance for particular claims.
In brief, the limit for public liability is $5,000,000 for any one claim, and for all other claims:
- relating to domestic plumbing work: $50,000
- relating to non-domestic plumbing work: $100,000 for any one claim or series of claims.
If you have any concerns about the plumbing work carried out by a licensed plumber, you should contact the plumber first to discuss your concerns and give them an opportunity to reassess and rectify any defective work.
If the issue is not resolved, you can lodge a complaint with the VBA. See VBA complaints process. We have powers to compel plumbing practitioners to rectify any defective or non-compliant plumbing work that we identify.
Release of plumber insurance details by the VBA
Generally, we cannot release a plumber’s insurance details to a consumer. We will only release a plumber’s insurance details in the following circumstances:
- We have identified non-compliant plumbing work and issued a rectification notice in relation to the works, and
- The rectification notice has not been complied with (and the plumber has been given all reasonable opportunities to comply), or
- We determined that the rectification notice cannot be complied with due to cancellation of the plumber’s registration or licence, the death of the plumber or the plumber is unable to be located.
The insurance details will be in writing and include the full name of the plumber, name of insurer and policy number (where known).
Requests for access to a plumber’s insurance details in all other circumstances should be made via the VBA Freedom of information process.