You take out the policy.
The owner is the one it protects.

Home Indemnity Insurance (HII) is governed by the Home Building Contracts Act 1991 (WA). It protects owners against financial loss where a builder cannot complete the work, or cannot meet a valid claim for faulty work, because of death, disappearance or insolvency. It is required for residential building work valued over $20,000. Confirm the current threshold and procedural requirements against the current WA source, as the specifics here are drawn from a 2017 WA Building Commission bulletin and fact sheet.

The structure surprises builders who have not read it: the policy is taken out in the owner’s name, so its benefit passes to a subsequent owner if the home is sold within the cover period. You take out a policy that protects someone else, against you failing.

Last resort: what HII actually is

HII is last-resort cover. It responds only where the builder cannot answer for the work because of death, disappearance or insolvency, not whenever a defect or dispute arises. Just as importantly, HII does not reduce the builder’s ongoing liability: the cover sitting behind a job does not move the responsibility for the work off the builder. In an ordinary dispute with a solvent, contactable builder, the policy does not respond, and the builder remains directly liable. That is worth being plain about with clients, so nobody mistakes the certificate for a general guarantee.

Cover, periods and exemptions

• Period: cover applies during the construction period and for six years from practical completion.
• Whose cover it is: the policy is in the owner’s name, so the benefit passes to a subsequent owner if the home is sold within the six-year period.
• Limits: the policy must pay up to $100,000, or the value of the contract work if less, plus no more than $20,000 for loss of deposit, with a $500 excess. These figures are drawn from the 2017 source and may have changed, so confirm the current limits.
• Exemptions: multi-storey multi-unit developments, fully leased retirement villages, subcontractors, demolition, and standalone associated work such as a pool, fence, pergola or landscaping.

A note on currency: the $20,000 threshold, the cover limits, the excess and the penalties below come from a 2017 WA Building Commission bulletin and fact sheet. Thresholds, limits and penalties may have changed since, so confirm every figure against the current WA source before relying on it. None of this is legal or financial advice.

The certificate and the notice

Before undertaking residential building work valued over $20,000, the builder must obtain a HII certificate of insurance before claiming any payment from owners or commencing work. The builder must then provide a copy of that certificate to the owner and to the permit authority as part of the building approval process. Separately, before a contract is signed or a deposit paid, the builder must give the owner a "Notice for the Home Owner" summarising the Act’s main requirements. A HII certificate of insurance is distinct from a certificate of eligibility or a construction or public liability certificate, which are not acceptable substitutes; confirm this against the current WA source.

The permit authority must be satisfied a valid HII certificate has been submitted before granting a building permit, and may refuse the application otherwise. Where there is a change of builder mid-construction and a new contract is entered, the replacement builder must obtain HII and provide the certificate to the owner.

For how Western Australia compares with the other states’ schemes, see our state-by-state home warranty guide, the NSW equivalent in our HBCF eligibility guide, and the Victorian scheme in our Domestic Building Insurance guide.

Nothing in software changes the scheme, and software does not affect the cover. VIABUILD does not provide, arrange, price or advise on insurance, and does not deal with the HII scheme. What software changes is whether the records the scheme runs on exist when you need them. Every pressure point above is documentary: showing the owner got their notice and their copy of the certificate, proving what the contract price was after variations, holding the records across a six-year tail, answering a claim from files rather than memory.

A platform that keeps the written contract, the "Notice for the Home Owner", the HII certificate copy, variations and costs and progress claims tied to the job is quietly building your compliance file as a by-product of normal work. And because HII responds on insolvency, keeping cost and cashflow visible is how a builder stays clear of the trigger in the first place. The alternative is reconstructing an old job’s history years later, from several ex-employees’ inboxes, under a claim deadline.