Part 1. Owner Builder Construction and Public Liability can be as confusing as any type of
insurance and as you are building to improve your family’s lifestyle, it is important that you
understand what you are covered for.
In this 3-part series, we will explain insurance terms, so you can access whether the policy that you
are accessing will protect you and your family fully.
Everyone wants to save money, but the successful Owner Builder takes the time to access and
compare ‘apples with apples’ and unfortunately we have seen Owner Builders who take the cheap
option lose out big time!
So, check, check and check!
Read the Product Disclosure Statement (PDS) carefully.
So, let’s get started –
Understanding Excess and how it can affect you in the event of a claim.
Excess or deductible is the amount of money you are required to pay when there is a successful
claim, usually it is deducted from the total amount you receive.
Theft/Burglary is the main type of claim and excess is divided into forcible (violent entry) they break
in or non-forcible (Non-violent entry) walk on the site and steal.
The excess amounts will differ in some cases with non-forcible being double e.g. $2000 forcible eg.
Why this is important to check? We have seen an excess for tools cover of $2000 and the tools cover
limit is $2000, so it pays to check!
Is the Public Liability restricted to the project site only?
This is Important as once the Owner Builder is away from the site they have no cover. What if the
Owner Builder is picking up materials for the project and drops them on someone or something
happens causing personal injury or property damage for which they (OB) will be liable, and that no
other policy will cover because it is a liability caused in their capacity as an Owner Builder. Could
potentially cost Millions. It will not be paid.
Most policies exclude Vibration, Removal and weakening of support.
This cover is vital if you are digging/excavating as it could affect the structural integrity of the
neighbours building. In Victoria (only) there is a 12-month extension to the normal 12-month policy
to give added protection to a neighbour’s property.
The Building Surveyor will require this policy addition before approving the permit.
In other states and territories, it is vital that the Owner Builder is protected by ensuring there is FULL
cover in the event of damage to the neighbour’s property.
Check, Check, Check.
Adding to an Owner Builders confusion is the amount of misleading information put out there as
fact. Our experienced Underwriter with over 40 years in the industry could not of put it any more clearly.
“In looking into the Owner Builder market, what I have seen is often misleading information
and wordings that are so deficient that they fundamentally fail to cover some of the most basic
owner builder needs while purporting to do so. In the event of a claim a failure to properly check the
policy could cost them hundreds of thousands even millions of dollars by taking out the wrong
CEO – Ensurance Underwriting.
Players come into the market offering ‘cheap’ insurance because they reduce the cover in
the areas that have the most claims!
• Theft – e.g. Tools, high excess, low cover.
• High excess – Less money in your pocket.
• Restricted Public Liability Cover – Do not cover you off site.
• Structural damage to neighbour’s property. – No cover.
• Flood – No cover.
So, if you think you will not have a claim, buy the cheap insurance with a lot less cover OR compare
and assess the policy, because to get the best cover for you and your family is not necessarily
• Theft – $1000 excess for both forcible and non-forcible entry.
• Vibration Removal and Weakening of support – Covered.
• Public liability – Not restricted to project site.