When builders fail there is often more insurance than you think, if you know how to claim

When construction companies fail, which is often, there is often plenty of insurance if things are structured right and YOU know how to claim…

Many know that in Victoria, Australia 🇦🇺 like many other states there is domestic builders warranty insurance (DBI) to cover defective or incomplete works on a dwelling

BUT that isn’t the only cover - there are other classes of insurance and means to recover IF YOU KNOW how…

FIRST, let me tell you about DBI cover in Victoria and why it is limited…

It only applies in Victoria when:

• a builder dies, disappears or is insolvent (last resort), this is changing 1 July 2026 but that is more complex and a topic for another article;

• a certificate is issued (‘Yes’ sometimes they are not issued or fraudulently issued!);

• a building is up to 3 storeys above ground level;

• in the case of low rise strata - the certificate of insurance is only issued to a lot owner and not the OC.

NOTE: common property can be claimed! Yes many don’t know this - it can be tricky but it can be done;

• up to $300,000 per certificate;

• for 2 years for non structural and 6 years for structural (this is debated too - as to how timing applies by insurers…given the lack of case law).

So to say the least, DBI coverage is limited, but BUT BUT…it does work and can cover defect claims.

DBI can also be claimed in addition to other claims and types of insurance. BUT only if you know how…

SECOND, many residential dwellings will also enjoy the benefit of plumbing insurance, statutory plumbing insurance is issued with coverage up to $50,000 per plumbing certificate, this is increased to $100,000 for commercial non domestic buildings.

Many buildings may have three or more plumbing certificates so it can add up.

PLUS Engineers, building surveyors and architects all have PI insurance too! Often for many millions each!

But here’s the thing, claiming for duty of care or misleading and deceptive conduct in the building industry beyond the warranties against a builder can be very complicated.

If you want to know how - get in touch!

Many would know that there is going to be a new dispute resolutions system in place this year for Victoria with new ‘rectification orders’ being the BPC’s first port of call.

Meaning that if you file a claim with the BPC they will be able to order the original builder to return and rectify.

At Brockhill & Usherwood Lawyers we have scoured the new legislation so you don’t have to. If you are builder, plumber or homeowner with defect issues make sure you get advice well before 1 July 2026!

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• insurance law
• building disputes
• building law