How to verify a builder's Home Building Compensation insurance in NSW
Short answer
For residential building work over $20,000, a NSW builder must give you a certificate of Home Building Compensation (HBC) insurance before taking any deposit or starting work. Ask for the certificate for your specific job — not a generic eligibility letter — and confirm it names your address, the builder, and the work. If a builder asks for a deposit without it, stop.
Home Building Compensation (HBC) cover — often called “home warranty insurance” — is the safety net if your builder can’t finish or fix the work. The mistake homeowners make is accepting a vague letter instead of the actual certificate.
When it is required
HBC insurance is required for residential building work over $20,000 (contract price including GST). The builder must hold eligibility and issue a certificate of insurance for your specific job before taking a deposit or starting.
What it covers — and its limits
It is a last-resort cover. If the builder dies, disappears, becomes insolvent, or has their licence suspended for failing to comply with a money order, HBC can pay toward completing the work or fixing major defects, within a capped amount and defined time periods. It is not a general warranty and it does not replace checking the builder first — it is what you fall back on when the checks turn out to have missed something.
How to verify it
- Ask for the certificate for your job, not a generic eligibility letter. Eligibility means the builder can get cover; a certificate means cover exists for your contract.
- Check it names your address, the builder, and the contract value. A mismatch — or a certificate for a different job — is worthless to you.
- Confirm it before any money changes hands. The certificate must precede the deposit.
Why insurance is the floor, not the check
An HBC certificate tells you a builder was eligible for cover at a point in time. It says nothing about their disciplinary history, whether their licence is still current, or whether the company is sliding toward insolvency — and eligibility itself can lapse when an insurer reassesses a builder’s finances. In BuilderVet’s data, 1,871 licences that appear in the register are not in a current state, and 482 licence holders carry disciplinary history — none of which a certificate reveals. Verify the builder, then treat the certificate as your fallback. Start at the builder directory.
Related questions
- When is HBC insurance required in NSW?
- For residential building work where the contract price is more than $20,000 (including GST). Below that threshold a certificate is not required, though the licence and other checks still apply.
- What does HBC insurance actually cover?
- It is a last-resort cover: if the builder dies, disappears, becomes insolvent, or has their licence suspended for failing to comply with a money order, it can pay toward completing the work or fixing major defects, subject to limits and time periods.
- Can a builder take my deposit before giving me the certificate?
- No. For work over $20,000 the certificate of insurance must be provided before the builder takes any deposit or other payment, and before work starts. A request for money without it is a serious red flag.
Updated 13 July 2026