Specialist Focus

Home Building
Compensation Fund,
explained.

The Home Building Compensation Fund (HBCF), previously known as Home Warranty Insurance, is a mandatory requirement for residential building work in New South Wales valued at $20,000 or more (including GST).

Before commencing work, signing contracts, or requesting any deposit or progress payment, licensed builders must obtain and provide an HBCF Certificate of Insurance to the homeowner or developer.

HBCF exists to protect homeowners when a builder is unable to meet their contractual or statutory obligations due to specific circumstances beyond the owner's control. It's a statutory product required by law.

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"Most construction firms only think about HBCF cover when it's already a problem. Our job is to make sure it never gets there."

Why HBCF Matters

HBCF is a statutory insurance scheme designed to provide financial protection to homeowners when a building project cannot be completed or defects cannot be rectified because the builder either:

  • Becomes insolvent
  • Ceases trading
  • Passes away
  • Cannot be located
  • Has their licence suspended due to non-compliance with a court or tribunal order

For residential builders, HBCF compliance is not optional. Residential building work above the legislative threshold of $20,000 cannot proceed without the appropriate insurance cover in place. Failure to comply can result in project delays, regulatory issues, and potential penalties.

Builder Eligibility Requirements

Before obtaining project-specific HBCF insurance, builders must first secure an Eligibility through iCare HBCF. As part of the assessment process, iCare reviews factors including:

  • Financial position and stability
  • Licensing history
  • Business structure
  • Building experience

Once eligibility is approved

Builders can apply for Certificates of Insurance for individual residential building projects.

A valid Certificate of Insurance must be issued to the homeowner or developer before:

  • Any building work begins
  • Any deposit is requested
  • Any payment is accepted under the building contract

This requirement applies to all eligible residential projects within NSW.

Valora Partners team

Why Choose
Valora Partners?

Valora Partners combines extensive builder warranty expertise with practical industry experience gained from senior leadership roles within the Australian Home Warranty sector.

We understand how eligibility assessments are conducted, what insurers look for, and how builders can strengthen their position before submitting applications.

Our goal is simple: Help builders secure and maintain HBCF capacity while supporting sustainable business growth.

Eligibility Assessments

Pre-application reviews to identify potential issues before submission.

Capacity & Limit Increase Applications

Strategic guidance and preparation to maximise approval prospects.

Financial Review Assistance

Pre-review and support in responding to insurer requests and addressing financial concerns.

Growth & Risk Advisory

Practical advice for builders seeking expansion while maintaining HBCF eligibility and capacity.

Stronger Foundations
Greater Heights