Does Building Without Required BII Carry a $20,000 South Australian Expiation Fee?

Yes—but only when building indemnity insurance (BII) is required. Under reforms that commenced on 15 January 2026, Consumer and Business Services (CBS) says carrying out building work without BII, when required, attracts a $20,000 expiation fee. SA.GOV.AU, in guidance updated 19 February 2026, says BII is required for domestic building work that must be approved by council and costs $20,000 or more; the fee is tied to BII-required work, not every building project.

For clarity, figures checked 1 October 2026.

When does the BII requirement apply?

SA.GOV.AU sets the requirement using the following conditions:

For domestic building work meeting those conditions, the building work contractor must arrange and pay for BII.

These conditions matter when assessing a penalty. “Building without BII” does not mean every building project attracts the $20,000 expiation fee: the relevant requirement is tied to the type of work, council approval and the stated project-cost threshold. If those facts are unclear, check the current regulator guidance before assuming either that BII is required or that the fee does not apply.

What changed on 15 January 2026?

The reforms were introduced by the Statutes Amendment (Building and Construction Industry Review—Penalties) Act 2025. CBS says the changes strengthen consumer protections, introduce offences, expand enforcement options and increase penalties.

The listed expiation fees include:

These amounts cover different breaches; the $20,000 figure is specifically tied to carrying out building work without required BII.

CBS also says repeat offences can attract increases of up to $150,000 for individuals and $550,000 for companies. It separately states that the Magistrates Court can impose penalties of up to $550,000 for offences under laws governing the building and construction industry. Those broader figures do not mean a BII breach automatically attracts the maximum court penalty.

In June 2026, CBS announced a dedicated Building Industry Response Team targeting unlicensed building work, misleading or improper advertising, failure to obtain BII and improper demands for payment. CBS expects increased compliance activity and enforcement, including expiation notices where breaches are identified.

How can you confirm BII is in place before work starts?

For BII-required work, SA.GOV.AU says building 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.

The practical sequence is:

1. The building work contractor arranges and pays for BII.
2. The owner and council receive the certificate of insurance.
3. Work starts only after those actions are complete.

Check that the certificate includes:

• the builder’s name and licence number;
• the insurer;
• the issue date;
• a description of the insured work; and
• any policy limitations or conditions.

Keep a copy for your records. Read the contract and certificate carefully, ask the contractor to clarify anything you do not understand, and contact the insurer to verify that a current policy is in place and ask how it works.

A certificate does not replace the policy’s Product Disclosure Statement (PDS). Check the PDS for the full terms, exclusions, limitations and conditions.

SA.GOV.AU also says you cannot take out BII if you are carrying out the building work yourself. If you are an owner-builder, ask CBS how the requirements apply to your circumstances rather than assuming a certificate can be arranged in the same way as by a contractor.

What does BII protect against?

SA.GOV.AU says BII protects the owner and future owners if the builder dies, disappears or becomes insolvent in relation to:

• work that has not been completed; and
• defective work that requires rectification.

Claims for defective work can usually be made up to 5 years from the date the building work was completed. That is why the certificate, policy details and insured-work description should be checked and retained rather than treating BII as an indefinite guarantee against every building problem.

The owner must also protect and separately insure items they own at the building site during construction, and insure the building once construction is complete.

What should you do if the job is near the threshold?

If the project is close to the $20,000 cost threshold or its council status is unclear:

• compare the job with SA.GOV.AU’s requirements for domestic building work, council approval and project cost;
• ask the builder who is responsible for arranging BII and when the certificate will be provided;
• confirm the policy directly with the insurer and read its PDS;
• check the regulator’s current BII page before relying on an old quote, contract or certificate;
• contact CBS on 131 882 if the requirements remain unclear.

If you are hiring a subcontractor, CBS also says to check that they are licensed through its Licensing Public Register. A licensing check is separate from confirming BII.

This is general information, not financial or legal advice. Check the current regulator page and the policy’s PDS for the requirements and coverage applying to your work.

Sources

• South Australia’s building and construction industry changes — Consumer and Business Services
• Building indemnity insurance — SA.GOV.AU

FAQ

Does the $20,000 expiation fee apply to every building project?

No. It applies to carrying out building work without BII when BII is required. SA.GOV.AU identifies the relevant requirement as domestic building work that must be approved by council and costs $20,000 or more.

Who must arrange and pay for BII?

The building work contractor must arrange and pay for it. SA.GOV.AU says a person cannot take out BII if they are carrying out the building work themselves.

Can work start before the council receives the BII certificate?

No. For BII-required work, SA.GOV.AU says the builder must have taken out BII and both the owner and council must have received a copy of the certificate before building work starts.

How can I confirm that the BII policy is current?

Confirm directly with the insurer. Check the builder’s name and licence number, insurer, issue date, description of insured work and any limitations or conditions, then read the policy’s PDS for the full terms.