NSW Home Building Compensation Cover: $340,000 for Projects Over $20,000

According to the NSW Government’s Service NSW guidance, dated 9 September 2024, a principal contractor must hold home building compensation (HBC) cover of at least $340,000 for a covered residential job where the contract price or market cost of labour and materials is over $20,000 including GST. The cover must be in place before work starts or any money is taken, including a deposit. If another licensed contractor subcontracts the work to you, the same guidance says you do not need HBC cover for that work.

figures checked 1 October 2026

What does HBC cover do?

HBC cover, formerly called home warranty insurance, helps protect home owners when their builder cannot complete building work or fix defects because of insolvency, licence suspension, death or disappearance, or cannot honour warranty obligations.

It is a safety net for specified circumstances, not a substitute for checking the contractor, contract and certificate before work begins.

What makes a job subject to HBC cover?

The builder must check each job against the requirements rather than looking only at its price.

Service NSW says projects that typically require HBC cover include:

• alterations or renovations of residential buildings of any height;
• construction of a house, duplex or triplex;
• low-rise residential multi-unit buildings up to 3 storeys high; and
• structures associated with a home, such as a backyard swimming pool, spa, garage or outbuilding.

These are examples rather than the only way to assess a job. The contract, relevant value and exemption status still need to be considered.

Does a subcontractor need separate HBC cover?

No separate HBC cover is needed if the work is subcontracted from another licensed contractor. That is different from a builder or tradesperson taking the job from the home owner, owner-builder or developer.

Builders should therefore identify who is contracting with the client before deciding which HBC rule applies. If the contracting structure is unclear, use HBC Assist and check the current regulator guidance.

How does a builder apply for HBC cover?

The Service NSW HBCF directory, dated 27 February 2026, identifies the State Insurance Regulatory Authority (SIRA) as the regulator of the HBC scheme. It also identifies icare HBCF as the only insurance provider offering HBC cover.

To be eligible, an applicant needs:

• a contractor licence for building, trade or specialist work;
• an ABN/ACN; and
• a Certificate of Eligibility.

HBCF assesses the risk of builders and tradespeople to determine their eligibility. The Certificate of Eligibility sets out how much work a contractor can take on.

The application process is:

• find an insurance broker distributor from icare HBCF’s list;
• obtain a Certificate of Eligibility from that distributor;
• submit the HBC application through the distributor; and
• once eligible, apply for a Certificate of Insurance for each individual project contracted.

How can builders and owners check the job and certificate?

HBC Assist and HBC Check answer different questions:

HBC Check is a free public register, and anyone can use it to confirm valid cover.

For a qualifying job:

• use HBC Assist to assess whether cover is required;
• obtain the Certificate of Insurance for that individual project;
• provide the certificate to the home owner before taking a deposit or starting work; and
• use HBC Check to confirm that the job is listed and the cover is valid.

Each qualifying job must have HBC cover taken out. Service NSW states that failing to take out the cover or provide the certificate as required is an offence under NSW law.

When can a home owner make a claim?

A home owner can make a claim on HBC cover if the builder cannot complete the work or honour warranty obligations because:

• the builder’s licence was suspended for failing to comply with a court or tribunal order to compensate the home owner;
• the builder becomes insolvent;
• the builder dies; or
• the builder disappears.

The home owner should check the current regulator guidance and the applicable policy’s PDS for the full claim conditions and process.

This is general information, not financial or legal advice. Check the current regulator page and the relevant policy PDS before contracting, taking a deposit, starting work or making a claim.

Sources

• Service NSW — Apply for home building compensation cover
• Service NSW — Home Building Compensation Fund (HBCF)

figures checked 1 October 2026

FAQ

Does a job priced at exactly $20,000 need HBC cover?

The stated threshold is over $20,000 including GST, not $20,000 or more. The test uses the contract price or market cost of labour and materials, so a contract price of exactly $20,000 does not by itself meet that wording. Use HBC Assist if the calculation is unclear.

When must the builder have HBC cover and provide the certificate?

For a qualifying job, the builder must hold the required cover before starting work or taking any money, including a deposit. The certificate must be provided to the home owner before the deposit is taken or work starts.

Does a tradesperson subcontracted by another licensed contractor need HBC cover?

Service NSW says HBC cover is not needed where the work is subcontracted from another licensed contractor. This is a specific contracting arrangement and should not be confused with taking residential work directly from a home owner, owner-builder or developer.

How can an owner confirm that HBC cover is in place?

Ask for the Certificate of Insurance before paying a deposit or allowing work to start, then use the free HBC Check public register to confirm that the job is listed and the builder or tradesperson has valid cover for the residential work in NSW.