If you’re a builder or tradie managing residential projects in South Australia, it’s essential to stay across changes to building indemnity insurance coming into effect from October 2025.
This specialised cover is a legal requirement for certain residential jobs and is designed to protect your clients, the property owners, if you’re unable to complete a project due to insolvency, death, or disappearance. While the insurance benefits the homeowner, it’s the builder who is responsible for arranging the cover before work begins or a deposit is taken.
With increased attention on builder insolvencies across the country, particularly in Victoria, South Australia is also seeing mounting pressures in the construction sector. Rising material costs, labour shortages, and broader economic challenges have all contributed to a more volatile environment. These factors make compliance with insurance requirements more important than ever, for both your client’s protection and your professional reputation.
What Is Building Indemnity Insurance?
Building indemnity insurance (also known as home warranty insurance) is mandatory in South Australia for most residential building work over a certain value. It offers protection to homeowners when the builder cannot complete or rectify the work due to specific circumstances such as:
- Insolvency
- Death
- Disappearance
It’s important to note that this cover applies only to certain types of residential work. Commercial projects, like warehouses, retail fit-outs, or office construction, are excluded from this scheme and require different forms of insurance.
Alternative Cover for Commercial Projects
If you’re working on a commercial build, indemnity insurance isn’t required, but other policies should be considered to manage risk and meet project requirements. These include:
- Contract Works Insurance: Covers the build during construction, including loss or damage due to fire, theft, or storms.
- Property Insurance: Protects the completed structure from damage caused by events like fire or vandalism.
- Public Liability Insurance: Covers injuries or property damage caused during the project.
Having the right insurance mix ensures you’re covered from all angles and can deliver confidence to your clients.
What’s Changing in South Australia?
The South Australian Government recently announced significant updates to building indemnity insurance, managed through QBE and the South Australian Government Financing Authority.
From 1 October 2025:
- The insurance cover limit will increase from $150,000 to $250,000 on new policies. (Source)
- Builder premiums will increase by 22% for Variable Rate policies. (Source)
From 10 November 2025:
- The threshold for works requiring building indemnity insurance will rise from $12,000 to $20,000. (Source)
- The “under $20,000” premium band will be removed.
What You Need To Do
As the builder, it’s your responsibility to arrange the appropriate building indemnity insurance before starting any eligible building work or taking a deposit from the homeowner. This ensures your client is protected, and that you remain compliant under state regulations.
Get In Touch
Not sure if a job needs building indemnity insurance or how changes might affect your costs and timelines? Safeguard works with builders and tradies across SA to keep your cover compliant, cost-effective, and built for your business.
Contact us today to make sure you’re ready for the changes ahead.
Call us on (08) 8371 0566
Email us at info@sib.com.au