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In the construction industry, safeguarding your livelihood requires careful planning and strategic decision-making. This article highlights some key considerations that may apply regarding the operations of your business, as well as the management of building contracts.
A builder’s financial health directly affects their ability to maintain DBI eligibility. Staying on top of financial management, ensuring accurate reporting, and keeping projects under control are all essential to safeguarding long-term business stability. A crucial element of this is managing accounting risks, which directly impact financial stability and compliance with insurer requirements. DBI eligibility and accounting risk are closely linked, financial mismanagement can quickly lead to problems that affect a builder’s ability to continue working.
Obtaining Domestic Building Insurance (DBI) is legal requirement for all building projects in Victoria over $16,000. As a builder, your ability to obtain and maintain Domestic Building Insurance (DBI) eligibility relies on several financial, regulatory, and operational factors. A crucial element of this is managing accounting risks, which directly impact financial stability and compliance with insurer requirements.
Embarking on a career as a builder is an aspiration for many, driven by the desire to contribute to the creation of dream homes, renovation projects, or extensions that enhance the lives of clients. However, the journey to becoming a builder entails more than craftsmanship—it involves navigating regulatory frameworks, obtaining licenses, and securing insurance coverage, all of which are essential components of operating within the construction industry.
To successfully operate as a domestic builder undertaking residential construction in Victoria, you are required to have a sound knowledge of your Domestic Building Insurance legal obligations. This includes the associated process to secure DBI eligibility and how to take out DBI certificates.
Builders play a critical role in maintaining the quality and safety standards of residential construction projects. By Law, builders in Victoria are required to take out domestic building insurance (DBI), also known as builder’s warranty insurance, for work valued at $16,000 or more.
Domestic Building Insurance (also known as Builder’s Home Warranty Insurance or Builder's Risk Insurance) has had considerable media attention in the past year, as part of broader media reporting on builder insolvencies. Despite this, there remains a lack of understanding of this type of insurance – its purpose, coverage, and value. Given the importance Domestic Building Insurance (DBI) plays in safeguarding what is often an individual’s most valuable asset - their home - understanding what this insurance encompasses, and what it doesn’t, is useful.
The Victorian Government has announced reforms to address the economic challenges builders face, including rising supply chain costs and lower consumer confidence in the wake of the Porter Davis insolvency. The reforms aim to strengthen the building system and provide better protection for homeowners while offering clarity to the building industry. This article outlines the key reforms.
The recent collapse of a major players in Australia's home construction industry is the latest in a string of domestic builder insolvencies. The fastest increase in interest rates in decades coupled with continually rising costs and fixed price contracts has further compounded industry challenges. Whilst the situation may be unnerving for consumers, understanding what protections are available when engaging a builder and how you can navigate Australia’s domestic construction landscape can provide peace of mind. Simon Johnson, Head of BRIC and Chitra Sharma, Team Leader, explain how.
