builders/ developers insurance

hi all
maybe someon ehere may know if anyone knows of an insurance policy from one of the insurance companies that wil cover the developer if the builder doesn't or can't complete.
and before (as I have had someone says home warranty or builder normal insurance) they don't cover until occupancy.
I am interested if anyone who works in the insurance industry knows of a policy that covers if the builder goes belly up that you can claim the portion to complete.

 

In Qld you pay the BSA (Building Services Authority - Qld Govt agency) a set fee based on the cost of the development. This gives you an insurance policy which then covers you for anything that may go wrong with the builder/building (faulty workmanship etc).

Mind you, I don't rate their service highly at all.

If the builder went belly up, you'd go close to doing the same waiting for the BSA to investigate your claim, then approve it, then get quotes for other builders to finish the work, then have the work finished.

I experienced this 12mths ago and ended up finishing the job myself and not bothering to wait for the BSA. Couldn't afford to wait another 6mths to complete it and lose out on interest and rental money.



I'm sure NSW would have a similar organisation.

Cheers
BUNDY

 

What typically happens in big deals is that the principal requires the builder to provide it with an on-demand bank guarantee, letter of credit or performance bond which can be presented for payment if there is default under the building contract.

That way you get cash to pay someone else to finish the project.

There are a number of surety bond providers around town, Chubb/Federal, AP Surety, QBE. I.e. you get surety/performance bonds from insurers.

BGs and L/Cs are available from a bank for a fee and cash collateral if the builder doesn't have an L/C facility in place with its bank.

Cheers
N.