No. South Australian Government guidance on SA.GOV.AU, updated 19 February 2026, says a builder must arrange and pay for building indemnity insurance (BII) when domestic building work requires council approval and costs $20,000 or more. Work cannot start until the builder has taken out BII and both the owner and council have received a copy of the certificate of insurance. Figures checked 1 October 2026.
What must be true for the $20,000 threshold to apply?
The price is only one part of the test. SA.GOV.AU describes the requirement where all of these conditions apply:
| Condition | Requirement |
|---|---|
| Type of work | Domestic building work |
| Approval | Council approval is required |
| Cost | $20,000 or more |
| Responsible party | The building work contractor arranges and pays for BII |
Work costing exactly $20,000 is included in the “$20,000 or more” threshold, provided the work is domestic building work requiring council approval.
Who must arrange and pay for BII?
The builder or building work contractor must arrange and pay for the policy. Arranging building indemnity insurance is not the owner’s responsibility under the requirement described by SA.GOV.AU.
The owner can still take an active role in checking the policy and certificate rather than relying only on confirmation that cover has been purchased.
What must happen before work starts?
The required sequence is:
| Stage | What must happen |
|---|---|
| Builder’s policy step | The builder arranges, pays for and takes out BII. |
| Certificate step | The owner and council each receive a copy of the certificate of insurance. |
| Start condition | Building work starts only after the builder has taken out the policy and both recipients have received the certificate. |
Merely arranging or paying for the policy is not enough. The certificate must also have been received by both the owner and the council.
Can an owner carrying out their own work take out BII?
No. SA.GOV.AU says that building indemnity insurance cannot be taken out by a person carrying out the building work themselves.
This is separate from the rule that a building work contractor must arrange the policy for council-approved domestic building work costing $20,000 or more.
What does BII protect against?
BII protects the owner and future owners in specified circumstances involving the builder. According to SA.GOV.AU, that protection applies where the builder:
- dies;
- disappears; or
- becomes insolvent.
The protection relates to:
- work that has not been completed; and
- defective works that require rectification.
Claims for defective work can usually be made up to $5 years from the date the building work was completed. The word “usually” matters: this is not described as an unconditional claim period for every circumstance.
How can the owner check the policy and certificate?
SA.GOV.AU advises confirming with the insurer whether a current building indemnity insurance policy is in place. The owner can also contact the insurer to verify the insurance details and ask how the insurance operates.
The certificate should be kept for records because it includes:
- the builder’s name and licence number;
- the insurance company;
- the date the insurance was issued;
- a description of the insured work; and
- any policy limitations or conditions.
The contract and certificate should also be read carefully. SA.GOV.AU advises not signing documents until the owner understands and is satisfied with their terms and conditions, and asking the contractor to clarify anything not fully understood.
What else does the owner need to arrange?
BII is not the only protection an owner may need to consider. SA.GOV.AU also says the owner should:
- protect and separately insure items they own at the building site during construction;
- insure the building when construction is complete; and
- disclose whether indemnity insurance is in place when selling the property.
Requirements and policy terms should be confirmed for the particular project. This is general information, not financial or legal advice. Check the regulator’s current page and the policy’s PDS before relying on the certificate or starting work.
Sources
FAQ
Can work costing exactly $20,000 start without BII?
No. If it is domestic building work requiring council approval and costs $20,000 or more, the builder must arrange and pay for BII. The owner and council must also receive the certificate before work starts.
Who is responsible for arranging and paying for BII?
The building work contractor is responsible for arranging and paying for the policy. However, SA.GOV.AU says a person carrying out the building work themselves cannot take out BII.
Is arranging the policy enough for work to start?
No. The builder must have taken out BII, and both the owner and council must have received a copy of the certificate of insurance.
How long do defective-work claims usually have?
SA.GOV.AU says defective-work claims can usually be made up to $5 years from the date the building work was completed. The current regulator guidance and policy terms should be checked for the particular circumstances.