Home Warranty Insurance

All electrical and communications contractors undertaking residential work in NSW must comply with the Home Building Act 1989.

Under the Act electrical and communications contractors are required to have Home Warranty Insurance if holding the main contract where the cost of the work being done directly for the owner of the property is in excess of $20,000. The contract of insurance must be in place and provided to the owner before any work is undertaken and prior to any payment being claimed.

All contracts with owners must be in writing but if you are a sub-contractor to a builder, developer or anyone else then Home Warranty Insurance is not required. In such cases, it is the person holding the main contract that is required to provide the insurance.

The purpose of the insurance is twofold. It protects the owners or buyers:

• From loss where the contractor has disappeared, died or become insolvent

• Where the contractor cannot compensate the owner or subsequent buyer for defective work, fails to rectify the work and breaches the statutory warranties stated in the Act.

The period of the Home Warranty Insurance is two years for unstructured work such as electrical and plumbing, and six years for structural work.

Home Warranty Insurance is available only from insurers approved by the NSW Government. NECA's insurance brokers can assist members in attaining this specific insurance. NECA members can contact the NECAGuard team on 1800 638 554 for an obligation free quote.

> Find out more about Home Warranty Insurance on the Fair Trading website.