According to the NSW Government’s Insurance cover for building work page, dated 06 July 2026, a licensed builder or tradesperson in NSW must get HBC cover for each home building project over $20,000, including GST. Service NSW’s Apply for home building compensation cover page, dated 9 September 2024, says that for a non-exempt project within that threshold, at least $340,000 of cover must be held before work starts or any money, including a deposit, is taken. Figures checked 1 October 2026.
What exactly is the $20,000 trigger?
The $20,000 figure is a job-value test. The $340,000 figure is the minimum amount of HBC insurance cover that must be held once the job falls within the HBC requirements.
They answer different questions:
| Question | NSW requirement |
|---|---|
| What is the job worth? | The contract price or market cost of labour and materials is over $20,000, including GST. |
| Who is the work contracted with? | A home owner, owner-builder or developer. |
| What kind of project is it? | A residential home or renovation project that is not exempt from insurance. |
| How much cover is required? | HBC cover of at least $340,000. |
| When must it be in place? | Before work starts or any money, including a deposit, is taken. |
The job value determines whether cover is required; the policy amount determines how much cover must be held. The project, contracting party and exemption status must also be considered.
Which residential jobs commonly require HBC cover?
Service NSW says projects that typically require HBC cover include:
- Alterations or renovations to residential buildings of any height.
- Construction of a house, duplex or triplex.
- Low-rise residential multi-unit buildings up to 3 storeys high.
- Structures associated with a home, including backyard swimming pools, spas, garages and outbuildings.
These examples remain subject to the job-value and other HBC requirements.
There is also a subcontracting exception. Service NSW states that HBC cover is not needed when the work is subcontracted from another licensed contractor.
What must happen before a deposit or work starts?
The required sequence is straightforward:
- Check whether cover is needed. Service NSW identifies HBC Assist as the tool for checking whether a particular job requires HBC cover.
- Take out cover for the job. HBC cover must be taken out for each job that meets the requirements.
- Hold the required cover. The cover must amount to at least $340,000 before the work or payment begins.
- Provide the certificate of insurance. The certificate must be given to the home owner before taking a deposit or starting work.
- Then take payment or commence work. The cover and certificate requirements come first.
Service NSW states that failing to take out the required HBC cover or provide the certificate of insurance is an offence under NSW law.
How does HBC Check verify registered cover?
HBC Check is the free public register of jobs that have HBC cover. Anyone can use it to confirm that a builder or tradesperson has valid registered cover for the residential work being undertaken in NSW.
The two Service NSW tools have different functions:
- HBC Assist checks whether a job needs HBC cover.
- HBC Check confirms whether registered HBC cover appears against the job.
The NSW Government also advises people contracting a builder or tradesperson to confirm that the business has valid insurance before paying any money or allowing work to start.
How does a builder obtain HBC cover?
Service NSW identifies the State Insurance Regulatory Authority (SIRA) as the regulator of the HBC scheme and icare HBCF as the only insurance provider offering HBC cover.
An applicant needs:
- A contractor licence for building, trade or specialist work.
- An ABN or ACN.
- A certificate of eligibility.
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 cover application through the distributor.
What does HBC cover protect against?
Home building compensation cover, formerly called home warranty insurance, helps protect home owners when the builder cannot complete building work or fix defects because of insolvency, licence suspension, death or disappearance, or cannot honour warranty obligations.
It is protection for those specified circumstances, not a general statement that every building problem or defect will be covered.
This is general information, not financial or legal advice. Check the current regulator information and your policy’s PDS for the requirements applying to your particular work.
Sources
- NSW Government — Insurance cover for building work
- Service NSW — Apply for home building compensation cover
FAQ
Is $340,000 the job price or the insurance amount?
It is the minimum amount of HBC cover that must be held for a non-exempt job within the HBC requirements. The separate job-value trigger is a contract price or market cost of labour and materials over $20,000, including GST.
Must HBC cover be in place before a deposit?
Yes. The required HBC cover must be held, and the certificate of insurance provided to the home owner, before taking a deposit or starting work.
What does HBC Check confirm?
HBC Check lists jobs that have HBC cover. Anyone can use the public register to confirm that a builder or tradesperson has valid registered cover for the residential work being done in NSW.
Does a subcontractor need separate HBC cover?
Service NSW says HBC cover is not needed when the work is subcontracted from another licensed contractor. That is the stated exception; the job’s registered cover can still be confirmed through HBC Check.