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Builders Warranty

 

Can we help with your Builders Warranty and Construction Insurance?

As a licensed building contractor, who undertakes residential building work valued at $12,000 or more and requires council approval, you are required to take out Builders Warranty Insurance in the name of the owner.

Builders Warranty Insurance covers the non-completion of residential building work up to $150,000 if the builder dies, disappears, or becomes insolvent. The policy also covers claims for defective workmanship made up to five years from the date of practical completion where the builder has died, disappeared, or become insolvent. It is a statutory requirement for builders to issue a Builders Warranty certificate when it meets the guidelines mentioned above.

Over the past 24 months, the building industry has presented builders and contractors with extensive challenges, from material and labour shortages to rising production costs, declining profit margins and insolvency. Consequently, insurers have become extremely strict and diligent with builders, sometimes placing a hold on their facility, leaving them unable to issue new builds or start any further work.

One of the most critical steps in obtaining Builders Warranty and Construction Insurance, and ensuring the best results from your facility, is providing the insurer with the most accurate and up-to-date information about you and your business. This includes correct financial reporting, clear and precise business goals and objectives and a solid reputation and credit history.

As a broker who deals solely with the Builders Warranty and Construction product, my expertise and knowledge are extensive. I work closely with my clients to develop a robust application for the insurer and problem-solve any issues that might arise to obtain the right cover. I now have access to an alternate product that has just entered the marketplace which will enable me to provide more flexibility and alternatives for my clients in South Australia and Victoria.

Below are two case studies which provide examples of how I have been able to assist my clients with obtaining, and getting the most from their Builders Warranty and Construction Insurance policies.

If you are curious or uncertain about your current policy and would like to discuss your future needs, I would be happy to hear from you. Please phone me on 13 1991 or email me at aluppino@guardian.net.au

 

Adam Luppino
Account Executive
Winner, NIBA Young Broker of the Year SA/NT

 

Case Study 1
Case Study 2

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Guardian Insurance Group is made up of the following entities:

  • Guardian Insurance Group Pty Ltd ABN 49 112 066 261
  • Guardian Insurance Brokers Pty Ltd ABN 16 070 398 195 AFSL 239120
  • Guardian Life Brokers Pty Ltd ABN 56 111 952973 AR No. 470986
  • (an authorised representative of Synchronised Business Services Pty Ltd ABN 33 007 207 650 AFSL 243313)
  • Guardian Claims Management Pty Ltd ABN 64 127 939 191

The information provided here is general advice only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these, having regard to the appropriateness of this advice, and the relevant Product Disclosure Statement, available by calling us on 8238 0100, before deciding to acquire, or continue to hold, any insurance product.

  • Guardian Insurance Group - Our Guarantee

    Our Guarantee

  • Guardian Insurance Group - Pay An Account

    Pay An Account

  • Guardian Insurance Group - Claims

    Claims

  • Guardian Insurance Group - Contact Us

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  • What A Broker Does

Guardian Insurance Group is made up of the following entities:
Guardian Insurance Group Pty Ltd ABN 49 112 066 261
Guardian Insurance Brokers Pty Ltd ABN 16 070 398 195 AFSL 239120
Guardian Wealth Solutions Pty Ltd ABN 56 111 952 973 AR No. 470986
Corporate Authorised Representative of Synchron Advice Pty Ltd ABN 33 007 207 650 AFS Licence 243313
Guardian Insurance Claims Management Pty Ltd ABN 64 127 939 191

The information provided here is general advice only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these, having regard to the appropriateness of this advice, and the relevant Product Disclosure Statement, available by calling us on 8238 0100, before deciding to acquire, or continue to hold, any insurance product.

Guardian Insurance Brokers Pty Ltd are proud signatories to the NIBA Insurance Brokers Code of Practice.  A copy of this Code can be found at  NIBA Insurance Brokers Code of Practice.
If you wish a printed copy of this Code, please contact our office on 08 8238 0100 and ask to speak to your Account Broker, who will provide a copy to you via post.

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Case Study 2

A client had their annual review due and provided the requested documentation to the insurer. This client had done their due-diligence, and to keep cash flow positive, had started selling some of their assets to help the business remain liquid.

On receiving this information, the insurer concluded that their asset base was no longer strong enough to support the annual limit that they needed to keep building. The insurer placed a restriction on the facility, halting certificates, and new work, as well as requesting for a capital injection of over $1.2 million due to their depleted asset position.

As the client had already begun selling assets, they were no longer in the position to gain that amount of capital in such a short period of time. Upon receiving this feedback from our client, we began discussions about their current situation and how we could best solve the problem.

We worked closely with our client and put together a business plan, which included their plans to replenish their asset position as their margins were slowly returning to a more normal level, giving them some more freedom for the future to stockpile some new assets.

The insurer reviewed the business plan and took the client and our commentary into consideration. With this updated information, the insurer looked at the situation favourably and were happy to provide a rollover of terms, subject to quarterly reviews. At the following quarterly review, our client was able to demonstrate an increase in asset base and profit margins from the last review.

Case Study 1

A client recently had their annual review for their Builders Warranty Insurance and provided the requested documentation and information to the insurer. Due to the ongoing challenges within the building industry seen over the last few years, the client’s margins were viewed as slim and did not look favourable to the insurer on the initial viewing.

As a result, the insurer placed a restriction on the facility, halting certificates, and new work. They also provided terms that halved our client’s current annual limit and requested a capital injection of over $300,000 to satisfy their requirements.

Due to this outcome, our client was unable to start any new work, and had no way to provide a capital injection of that size in the short time frames outlined by the insurer. Our client proceeded to tell us that he would be calling his accountant to draft up the documentation to place his busi- ness into liquidation, as he thought that this was his only option.

After considerable discussion with the client, we initiated a meeting with him and his accountant and were able to talk through the documents that had been provided to insurer. We discovered that the accountant had not reported the information correctly and had overlooked a large portion of the business income and assets.

The accountant reviewed all the financial statements and documentation, providing updated versions that were then resubmitted to the insurer for review.

The insurer was happy with our client’s updated and correct financial reporting, and provided revised terms for the facility which included a rollover of his annual limit, and no facility restriction meaning we could start issuing certificates again.