The short answer
Building and Energy says home indemnity insurance is required for building work that needs a building permit and is valued at more than $20,000. It covers loss of a deposit up to $40,000 and incomplete or defective work up to $200,000 if the builder cannot finish or fix it.
Western Australia only. Summarised from Building and Energy pages. Sources differ on some older limits, so check the current page.
Confidence: likely. These facts come from official pages that we found by search and did not read in full. Check the linked source before you rely on a figure.
Who arranges it
The builder takes out the policy in your name before any payment, including a deposit, is accepted or work starts, and gives you a certificate.
What it covers
It protects you if the builder dies, disappears, becomes insolvent or has certain registrations cancelled. Cover generally runs during construction and for six years from practical completion.
Exceptions
It is not compulsory for associated work alone, such as swimming pools, carports, pergolas and landscaping.
Common questions
When is home indemnity insurance required in WA?
For building work that needs a building permit and is valued at more than $20,000.
Sources
- Building and Energy: home indemnity insurance responsibilities for builders, checked 11 November 2026