Under SA Government guidance updated 19 February 2026, domestic building work requiring council approval and costing $20,000 or more must have building indemnity insurance (BII) arranged and paid for by the builder; work cannot start until both the owner and council receive a copy of the certificate (figures checked 1 October 2026). The same guidance says defective-work claims can usually be made up to 5 years from the date the building work was completed. When selling the property, the owner must disclose whether indemnity insurance is in place.
Who must arrange and pay for BII?
For domestic building work that requires council approval and costs $20,000 or more, the building work contractor must arrange and pay for the policy.
A person carrying out the building work themselves cannot take out BII. An owner should confirm with the insurer that a current policy is in place rather than relying only on a builder’s verbal confirmation.
When can work start?
Building work cannot start until all these actions are complete:
- The builder has taken out building indemnity insurance.
- The owner has received a copy of the certificate of insurance.
- The council has received a copy of the certificate of insurance.
The owner does not need to hold a separate BII policy for the builder’s cover, but should obtain and retain the certificate for their records.
What details should be checked and kept?
The certificate contains the core details needed to identify and check the policy:
| Certificate detail | What to check and retain |
|---|---|
| Builder | Builder’s name and licence number |
| Insurer | Name of the insurance company |
| Issue date | Date the insurance was issued |
| Insured work | Description of the work covered |
| Policy terms | Any limitations or conditions applying |
Keep a copy of the certificate with the building records. Also:
- Read the contract and certificate carefully.
- Ask the contractor to explain any terms or conditions you do not fully understand.
- Do not sign documents until you understand and are satisfied with their terms and conditions.
- Contact the insurer to verify the insurance details, confirm the policy is current and ask how the insurance works.
What does BII protect against?
The SA Government describes BII as protection for the owner and future owners if the builder dies, disappears or becomes insolvent in relation to:
- Building work that has not been completed.
- Defective works that require rectification.
Defective-work claims can usually be made up to 5 years from the date the building work was completed. Because the guidance uses the word “usually”, check the certificate and policy terms for the applicable conditions rather than treating that period as an automatic claim outcome.
What must the owner insure separately?
The owner must also consider separate protection for:
- Items they own that are at the building site during construction.
- The building once construction is complete.
These requirements should be considered alongside BII rather than treated as part of the builder’s certificate.
What must be disclosed when the property is sold?
The owner must disclose whether indemnity insurance is in place when selling the property. Retain the certificate with the building records and confirm the policy status with the insurer if the information is unclear or may have changed.
This is general information, not financial or legal advice. Check the current SA Government regulator page and the policy’s Product Disclosure Statement for the exact cover, limitations and conditions.
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FAQ
When must the owner and council receive the BII certificate?
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.
Does the builder have to pay for BII?
Yes. For domestic building work requiring council approval and costing $20,000 or more, the building work contractor must arrange and pay for BII.
Can an owner take out BII for their own building work?
No. The SA Government states that BII cannot be taken out by a person carrying out the building work themselves.
What should the owner do if the certificate details are unclear?
Ask the builder to clarify the contract or certificate, then contact the insurer to verify the policy details and ask how the insurance works.
Must indemnity insurance be disclosed when selling the property?
Yes. The owner must disclose whether indemnity insurance is in place.
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