information for builders


Eligibility is the term used to describe the entitlement that a builder or trade contractor has to apply for a Certificate of Insurance  (CoI) for specific home building project, and the conditions under which the Certificate of Insurance may be granted.

A Certificate of Eligibility is granted after a builder has been successfully assessed by an approved Scheme Agent.

Making Application for Eligibility

A builder wishing to obtain a Certificate of Eligibility needs to: contact an approved Distributor, complete an Eligibility & Profile Change Application form, and submit the form through their appointed Distributor. Also, for assistance in completing the form, builder should contact the Distributor.  

The Scheme Agent uses the builder’s financial statements to assess their financial viability and may make further enquiries to seek clarification of issues associated with the builder's application. Refer to the 'Underwriting Assessment' process.

Underwriting Assessment

In providing cover to builders, HBCF takes on a risk that the builder is unable or unwilling to complete the construction of a dwelling or return and rectify defective work. To reduce this risk, an underwriting assessment is carried out on the builder’s application for eligibility prior to the purchase of an insurance certificate. An overview of the underwriting assessment process is contained in the Eligibility and Underwriting Information for Builders.
Detailed information about how a new application for a Certificate of Eligibility or an update to a builder's eligibility profile is processed can be found in the HBCF Underwriting Guidelines.
The Scheme Agent advises the Distributor of the outcome of the eligibility assessment. The Distributor passes on the outcome to the builder.
Where builders are assessed as a "high risk", this may result in the eligibility application being declined or special conditions included.
Once the application has been assessed, approved builders are provided a Certificate of Eligibility that summarises the eligibility conditions placed upon a builder. These conditions include:
Maximum individual construction value
Types of construction permitted
Open job limits (number and total value).

Profile changes initiated by the Builder

Builders seeking to change their eligibility profile, (e.g. from single dwelling to multi-unit development construction, increase in limit etc.) need to complete an Eligibility and Profile Change Application form and apply through their Distributor for assessment. Profile changes can have financial consequences for a builder. This can include: changes to working capital requirements, building cycles, and available resources & management. Consequently, the underwriters will examine all factors that may affect future viability when they make their assessment of the application (refer to 'Eligibility Underwriting Assessment' process).

Ongoing Review of Eligibility

Eligibility is generally subject to review. The frequency of the review is determined by the Scheme Agent on completion of the underwriting assessment, and by HBCF through its programmed periodic review requirements. The Scheme Agent may also undertake a special eligibility review if it appears a builder’s circumstances have changed. The underwriter will assess the financial viability of the builder to continue to hold eligibility.

Cancellations, Suspensions & Modifications

Some builders may have their eligibility cancelled, suspended, or have restrictive modifications applied by the Scheme Agent. The Scheme Agent will provide the builder with reasons for the decision and give ten business days notice of any decision.
The Underwriting Guidelines contain more information about the circumstances when this can occur. Builders should be aware that Certificates of Insurance cannot be issued against a cancelled or suspended eligibility. 
Eligibility will also be cancelled where a builder's licence has been cancelled or suspended by NSW Fair Trading under the Home Building Act 1989 and where a licence has expired for longer than three months (i.e. the licence is unable to be renewed or restored). The Scheme Agent is not required to give ten business days notice in these circumstances.