When Do SA Builders Need Building Indemnity Insurance? The $20,000 Threshold and QBE's 9% Limit Increase

From 10 November 2025, builders must arrange and pay for building indemnity insurance (BII) where domestic building work requires council approval and costs $20,000 or more; the South Australian Government Financing Authority (SAFA) says the previous $12,000 threshold applied until that date. SAFA records a $250,000 QBE policy limit for policies issued from 1 October 2025 and announced a separate 9% increase to eligible QBE builders’ eligibility and job profile limits on 1 July 2026. Figures checked 1 October 2026.

When did the $20,000 threshold start applying?

Before 10 November 2025, BII was required for building work that required development approval and had a value of at least $12,000.

From 10 November 2025, the threshold increased to $20,000 under the Building Work Contractors Regulations. The current rule applies to domestic building work that:

• requires council approval;
• costs $20,000 or more; and
• is being carried out by a builder rather than an owner-builder.

The builder must take out the policy for the homeowner for every contract entered into and must arrange and pay for it. People carrying out their own building work cannot take out BII.

What does building indemnity insurance cover?

The policy is issued in the homeowner’s name and can protect the homeowner and future owners against financial loss, up to the policy limit, if the builder:

• dies;
• disappears; or
• becomes insolvent,

where the work is unfinished or defective work still needs rectification.

Claims for defective building work can be made up to 5 years after the work has finished. Anyone who thinks they may have a claim should contact their insurer first.

What is the maximum QBE policy limit?

The QBE limit depends on when the policy was issued:

The $250,000 QBE limit applies to policies issued on or after 1 October 2025; policies issued before that date retain the limit for their issue period. From 10 November 2025, the Building Work Contractors Regulations prescribe a $250,000 limit for all new policies issued in South Australia, regardless of insurer.

The policy limit is the maximum protection, not an automatic payment of that amount for every loss. Check the certificate and the policy’s Product Disclosure Statement (PDS) for its conditions and limitations.

Did QBE’s 9% increase change the $250,000 policy limit?

No. The 9% adjustment applied to eligible builders’ eligibility and job profile limits, not to the maximum amount payable under each BII policy.

For the 1 July 2026 adjustment, SAFA announced:

The Government of South Australia has committed to a process that automatically reviews and increases builder eligibility limits at regular intervals in response to rising construction costs. Construction costs are to be reviewed annually, with the intention of applying increases on 1 July each year.

That does not guarantee an increase every year. Future decisions may depend on a range of factors, and brokers will receive annual correspondence when an increase is to be applied. Builders seeking confirmation of their own eligibility limits should contact their registered insurance broker.

How is BII arranged and checked?

Builders seeking BII eligibility must arrange it through an insurance broker. A broker can facilitate eligibility with QBE Insurance (Australia) Limited, Assetinsure or AB Phillips. Builders may also approach Assetinsure or AB Phillips directly. AB Phillips’ cover is tailored only to the pool, spa and landscaping sectors.

SAFA lists these insurer contacts:

Homeowners are encouraged to confirm that a valid certificate is in place. SAFA lists certificate registers for QBE and Assetinsure; AB Phillips certificates can be validated by contacting the insurer.

Building work cannot start until:

• the builder has taken out BII;
• the homeowner has received a copy of the certificate; and
• the council has received a copy.

Keep the certificate because it records the builder’s name and licence number, insurer, issue date, description of the insured work, and any policy limitations or conditions. The South Australian Government’s guidance, updated 19 February 2026, also explains that owners must disclose whether indemnity insurance is in place when selling the property and separately insure items they own at the building site during construction.

This is general information, not financial or legal advice. Check the current South Australian Government guidance, confirm licensing matters with Consumer and Business Services, and read the policy’s PDS before relying on a summary.

Sources

• Building Indemnity Insurance — South Australian Government Financing Authority
• Building indemnity insurance — SA.GOV.AU
• What’s New — South Australian Government Financing Authority

FAQ

Does every building job in South Australia need BII?

No. Under the rule applying from 10 November 2025, BII is required for domestic building work requiring council approval and costing $20,000 or more. The builder must arrange and pay for the policy; an owner-builder cannot take it out.

What losses can BII cover?

It can cover financial loss up to the policy limit if the builder dies, disappears or becomes insolvent before unfinished work is completed or defective work is rectified. The policy is issued in the homeowner’s name.

Does QBE’s 9% adjustment increase the $250,000 policy limit?

No. The 9% adjustment concerned eligible builders’ eligibility and job profile limits. QBE policies issued from 1 October 2025 have a separate maximum policy limit of $250,000.

How long can a homeowner make a defective-work claim?

Defective-work claims can usually be made up to 5 years after the building work was completed. Contact the insurer first if a claim may be possible.

How can a homeowner confirm that BII is in place?

Check the relevant insurer’s certificate register or contact the insurer to confirm the policy details. The homeowner and council must both receive a copy of the certificate before building work starts.