NSW HBC Cover 2026: $20,000 Project Threshold and $340,000 Cover

Under current NSW rules, a principal contractor must hold home building compensation (HBC) cover of at least $340,000 before requesting or accepting money, including a deposit, or starting work on a non-exempt residential project when the contract price—or the reasonable market cost of labour and materials if there is no contract price—is more than $20,000 including GST. The State Insurance Regulatory Authority (SIRA) confirms the project threshold in guidance published 9 July 2026, while Service NSW specifies the $340,000 minimum in guidance updated 9 September 2024 (figures checked 1 October 2026). The principal contractor must give the homeowner the certificate of insurance before taking a deposit or starting work.

Who is the principal contractor responsible for the cover?

A principal contractor generally contracts directly with a homeowner, developer or owner-builder permit holder. A licensed contractor doing residential building work on land they own, otherwise than under an owner-builder permit, may also be a principal contractor.

Only the principal contractor can satisfy the insurance obligation under the Home Building Act 1989. The policy must be taken out in the same name used to contract the work, including the corporation’s name when the contract is in that name.

The principal contractor cannot ask employees, subcontractors or other workers to take out insurance instead. Their cover does not transfer the obligation to them.

How is the more-than-$20,000 project threshold calculated?

The threshold includes GST and depends on how the work is arranged:

Residential projects that typically require cover include alterations and renovations of any height, houses, duplexes and triplexes, low-rise residential multi-unit buildings up to 3 storeys, and associated structures such as swimming pools, spas, garages and outbuildings.

Use the HBC Assist tool to check whether the particular job needs cover. If the project may be exempt or its classification is unclear, check the current regulator guidance before proceeding.

When must the cover and certificate be in place?

The timing rules apply to both the insurance and the certificate:

Service NSW states that failing to take out the required cover and provide the certificate is an offence under NSW law. SIRA also warns that uninsured work may affect a contractor’s ability to enforce the contract or recover customer money, and may affect planning-law requirements or project commencement and certification.

How do I apply and verify HBC cover?

HBC Assist and HBC Check answer different questions:

To apply through the process described by Service NSW:

• Find an insurance broker distributor from icare HBCF’s list.
• Obtain a certificate of eligibility from that distributor.
• Submit the HBC cover application through the distributor.

Eligibility also requires a contractor licence for building, trade or specialist work and an ABN or ACN.

A homeowner or prospective purchaser should check HBC Check before relying on the cover. SIRA warns that if work was not insured, a current or future homeowner may be unable to claim under the scheme.

What does HBC cover protect against?

HBC cover helps protect homeowners when the builder cannot complete building work or fix defects because of insolvency, a relevant licence suspension, death or disappearance. It can also respond where the builder cannot honour warranty obligations.

The protection is tied to those specified circumstances. It should not be treated as a general guarantee that every building defect will be rectified or that a claim will necessarily be paid.

How is HBC different from public liability insurance?

Business.gov.au explains that public liability insurance responds when negligence causes death, injury or property damage to another person. HBC cover addresses a different risk: a homeowner’s inability to obtain completion, defect rectification or warranty performance because of the builder’s insolvency, death, disappearance or a relevant licence suspension.

One policy does not replace the other. An HBC Check result confirms HBC registration; it does not establish that a public liability policy is in force.

This is general information, not financial or legal advice. Check the current SIRA or Service NSW regulator page for the job and read the relevant policy’s Product Disclosure Statement before arranging cover or making a claim.

Sources

figures checked 1 October 2026.

• Apply for home building compensation cover | Service NSW
• Insurance obligations for residential building works | SIRA
• Types of business insurance | business.gov.au

FAQ

Does the NSW HBC threshold include exactly $20,000?

No. The current threshold is more than $20,000 including GST, not $20,000 or more. When a project is divided between contracts, SIRA says the total of all contracts is used to assess the threshold.

Does every builder and subcontractor need their own HBC policy?

No. Employees and subcontractors working for a licensed principal contractor generally do not need separate HBC cover. The principal contractor remains responsible and cannot satisfy that obligation through a worker’s policy.

When must the homeowner receive the certificate of insurance?

The principal contractor must provide the certificate before taking a deposit or starting work. The cover must already be in place when the money is requested or accepted and before residential building work begins.

Can a homeowner check whether a job has HBC cover?

Yes. HBC Check is a free public register that lists jobs with HBC cover. Anyone can use it to confirm that a builder or tradesperson has valid cover for the residential work being undertaken in NSW.

Does HBC cover replace public liability insurance?

No. HBC cover addresses specified failures by a builder to complete work, fix defects or honour warranties. Public liability insurance addresses negligence causing injury, death or property damage to another person. Check the relevant cover separately.