Who Must Carry HBC Cover for an NSW Renovation Over $20,000?

For NSW residential building work priced over $20,000 inclusive of GST, the principal contractor must take out home building compensation (HBC) insurance; employees and subcontractors cannot substitute their own cover for that obligation (State Insurance Regulatory Authority (SIRA) guidance, dated 9 July 2026). Employees and subcontractors working for a licensed principal contractor generally do not need separate cover under the scheme, but the principal contractor must take it out in the same name used to contract the work and before requesting or accepting any money, including a deposit, or doing any residential building work. Figures checked 1 October 2026.

Who has to carry the HBC insurance?

Only the principal contractor can satisfy insurance obligations under the Home Building Act 1989. You will generally be the principal contractor if you contract directly with a homeowner, developer or owner-builder permit holder for work covered by that permit. A licensed contractor doing residential building work on land they own without an owner-builder permit is also generally a principal contractor.

For a carpentry business, the contracting arrangement is therefore important. An employee or subcontractor cannot satisfy the principal contractor’s obligation by taking out a policy, and insurance held by an employee or subcontractor does not cover the principal contractor.

When does the over-$20,000 threshold apply?

SIRA’s guidance sets the following tests:

Constructing, altering or renovating a dwelling are examples of residential building work. For a project carried out under several contracts, do not assess each contract in isolation; SIRA says to use the total.

Whose name must be on the cover?

The principal contractor must take out insurance in the same name used to contract the work. If the work is contracted in a corporation’s name, the insurance must also be taken out in that corporation’s name.

The timing is equally important. Cover must be in place:

• before requesting any money under the contract;
• before accepting any money, including a deposit; and
• before doing any residential building work under the contract.

Waiting until after the first payment or the start of work does not meet the stated requirement.

How do eligibility and project certificates fit together?

Service NSW’s HBCF directory entry, updated 27 February 2026, says icare manages the Home Building Compensation Fund. HBCF provides a safety net for NSW homeowners facing incomplete or defective building work performed by a builder or tradesperson.

The scheme process includes:

• HBCF assessing the risk of builders and tradespeople to determine their eligibility for insurance.
• A Certificate of Eligibility setting out how much work the contractor can take on.
• Once eligible, a builder or tradesperson applying for a Certificate of Insurance for each individual project they contract to do.

The listed public scheme information is available on icare’s HBCF page. SIRA also advises that insurance may be bought from an insurer or provider licensed by SIRA and publishes a list of approved licence holders.

How can a homeowner check whether the work is insured?

SIRA publishes a public register that can be searched to determine whether a principal contractor has taken out insurance. Homeowners and purchasers of new or renovated homes should check the contractor’s details, particularly that the insurance is recorded in the same legal name that entered into the contract.

Uninsured work may leave a current or future homeowner unable to claim under the scheme. A project-specific Certificate of Insurance is therefore relevant evidence, but checking the public register can also confirm the position recorded by SIRA.

What can happen if the principal contractor does not insure?

Failure to insure may affect the contractor’s ability to enforce the contract or recover money from the customer. It may also affect planning-law requirements and the commencement or certification of the project.

SIRA states the following maximum penalties:

Who can answer scheme questions?

Service NSW lists the following HBCF contact details:

• General enquiries: (02) 9216 3224, 9am to 5pm
• Email: enquiries.hbcf@icare.nsw.gov.au
• Postal address: HBCF, GPO Box 4052, Sydney NSW 2001

This is general information, not financial or legal advice. Check the current SIRA regulator guidance and icare HBCF page, and read the relevant policy’s Product Disclosure Statement (PDS), before relying on a coverage decision.

Sources

• SIRA — Insurance obligations for residential building works
• Service NSW — Home Building Compensation Fund
• icare — Home Building Compensation Fund

FAQ

Do employees and subcontractors need their own HBC insurance?

Generally, no. Employees employed by a licensed contractor and subcontractors working for a licensed contractor do not need separate insurance under the scheme when the principal contractor is responsible for insuring the work.

Does a subcontractor’s insurance cover the principal contractor?

No. Insurance taken out by an employee or subcontractor does not cover the principal contractor. Only the principal contractor can satisfy the insurance obligation under the Home Building Act 1989.

When must the principal contractor take out cover?

Before requesting or accepting any money, including a deposit, or doing any residential building work under the contract.

Does the threshold include GST?

Yes. SIRA’s test is a price over $20,000 inclusive of GST. If the price is unknown or there is no contract, the test uses the reasonable market cost of labour and materials.

How can a homeowner verify the contractor’s cover?

Search SIRA’s public register and confirm that the principal contractor has taken out insurance. The insurance should be in the same legal name used to contract the work.