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Urgent Industry Alert: Domestic Building Insurance (DBI) invalid policies

The VBA has received an increasing number of complaints about DBI policies that are not valid as the name of the builder/building company to whom the DBI policy is issued is not consistent with the name of the builder/building company on the Domestic Building Contract and the Building Permit.

This leaves the property owner without access to DBI as required by legislation.

Currently, the VBA has several DBI related matters under active investigation. 

Builders and Building Surveyors must have regard to the below legislation to ensure that property owners have access to DBI to which they are entitled or face penalties and/or disciplinary action.

Builders:

Under section 136(2) of the Act, a builder must not carry out or manage or arrange the carrying out of domestic building work under a major domestic building contract unless the builder is covered by the required insurance.

Penalty:

  • 500 penalty units, in the case of a natural person
  • 2,500 penalty units, in the case of a body corporate

Building Surveyors:

Under section 24A of the Building Act 1993 (Act), the Relevant Building Surveyor (RBS) must not issue a building permit unless the RBS is satisfied the named builder/building company on the building permit is identical to the named builder/building company on:

  • the major domestic building contract; and
  • the certificate of insurance from the insurer.

The requirements of the legislation are illustrated below:

Industry Alert DBI invalid policies diagram

If you have any questions, please contact the VBA on 1300 815 127.

Andrew Cialini
State Building Surveyor
Victorian Building Authority