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Building indemnity insurance (SA)

Building indemnity insurance is SA's mandatory last-resort home warranty cover ($250,000) for domestic contracts over $20,000 requiring development approval.

By Dan Waring. Last updated 11 June 2026. Verified 11 June 2026.

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Building indemnity insurance (BII) is South Australia’s mandatory last-resort consumer protection for domestic building work. It covers the homeowner for up to $250,000 if their licensed builder dies, disappears, or becomes insolvent before completing the work or rectifying defects. The insurance is issued in the owner’s name but obtained and paid for by the builder.

When it applies: From 10 November 2025, BII is required for any building work contract over $20,000 that requires development approval (verified 2026-06-11, Lynch Meyer Lawyers: Upcoming Changes to Building Indemnity Insurance Explained). The previous threshold was $12,000. Work under the threshold, or work not requiring development approval, is exempt.

What it covers:

  • Non-completion of work (builder cannot finish)
  • Defective work that requires rectification
  • Loss of deposit paid before work commenced

Cover applies only where a trigger event has occurred: the builder’s death, disappearance, or insolvency. While the builder is solvent and contactable, the homeowner pursues them directly under the statutory warranty provisions of the Building Work Contractors Act 1995 (SA) (5-year claim period from practical completion). BII is the fallback when that direct route has collapsed.

Builder obligations:

  1. Obtain the BII certificate from an approved insurer before taking any payment (including deposit) or commencing work.
  2. Provide a copy of the certificate to the owner before work starts.
  3. Include the premium in your contract price as a disclosed line item.

Scheme details (verified 2026-06-11, SAFA: Building Indemnity Insurance):

ItemDetail
Minimum cover$250,000 (applies to all new policies from 10 Nov 2025)
Trigger thresholdContracts over $20,000 requiring development approval
Who takes it outThe licensed builder, before taking any payment
Trigger eventsBuilder death, disappearance, insolvency
AdministratorSouth Australian Government Financing Authority (SAFA); issued via approved insurers (e.g. QBE)

SA’s scheme is one of seven state and territory home warranty insurance schemes in Australia. Its direct counterparts are HBCF (NSW), DBI (VIC), QHWS (QLD), and HII (WA).

Also known as: BII, SA home warranty insurance.

Category: Insurance / consumer protection.

See also

References

Last updated: 2026-06-11. Verified: 2026-06-11. Quarterly review for currency.

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