How to Claim on Building Indemnity Insurance in South Australia

What it is

Building Indemnity Insurance (BII) is South Australia's compulsory home warranty insurance scheme under section 34 of the Building Work Contractors Act 1995 (SA). BII is provided by the SA Government Financing Authority (SAFA), a government insurance provider rather than a private insurer. That government-provider model is different from every other Australian state.

Cover is compulsory for domestic building work over $20,000 that requires development approval, from 10 November 2025. Before that date the threshold was $12,000. Minimum cover is $250,000 (raised from $80,000 on the same date). The 5 year policy period runs from completion of the building work.

Trigger events

BII cover triggers under section 34 of the BWCA and SAFA scheme conditions are:

• the builder has died
• the builder has disappeared and cannot be found
• the builder is insolvent (bankruptcy or company insolvency)

Note the SA trigger set is narrower than WA's HII (which also covers registration cancelled on financial grounds). A South Australian builder losing the licence for non-financial reasons does not trigger BII.

For a live defect complaint against a solvent, licensed builder, BII is not the pathway. The remedy runs through CBS conciliation and then the Magistrates Court under its minor civil (building work) jurisdiction, inside the strict 5 year section 32(5) statutory warranty period.

Cover structure

Minimum cover is $250,000 per contract from 10 November 2025. That is a single overall cap covering both non-completion and defects.

Cover applies to defects and non-completion notified within 5 years of completion. That aligns with the section 32(5) statutory warranty period under the BWCA. Where the trigger event occurs 4 years after completion, the owner has the remainder of the 5 year window to lodge the claim.

The multi-storey exemption

BII does not apply to multi-storey residential buildings (more than 3 storeys, 2 or more dwellings). Owners of apartments in larger developments rely on other protections, including any developer bonds or professional indemnity arrangements at the design and construction layer.

The builder's certificate obligation

Section 34 requires the builder to hold a BII certificate before work commences and to give the owner the certificate. The builder pays the SAFA premium as part of the compliance process.

Failure to hold BII where required is an offence and grounds for CBS licensing action against the builder. It also gives the owner strong grounds to invoke section 36(5)(b) of the BWCA (owner extended termination for builder non-compliance).

How to lodge a claim

Claims are lodged with SAFA. The claim requires:

• the BII certificate of insurance number
• proof of the trigger event (bankruptcy order, insolvency notice, disappearance evidence)
• description of non-completion or defect
• rectification or completion cost estimate with supporting quotes
• inspection or engineering reports where required

SAFA assigns a claims officer and arranges an assessment. Where the claim is accepted, SAFA either arranges completion or rectification work directly, or reimburses the owner for the cost.

Notification window

Claims must be notified to SAFA within the 5 year policy period. There is no additional short post-trigger window comparable to Victorian legacy DBI 180 days. That gives SA owners more flexibility on claim timing, provided the underlying defect or non-completion falls inside the 5 year window and the trigger event has occurred.

The 10 November 2025 changes

The 10 November 2025 SA regulation changes moved three levers at once. The BII trigger value moved from $12,000 to $20,000. The minimum cover moved from $80,000 to $250,000. The link to development approval was added as a criterion. Those changes followed SAFA's March 2025 Building Indemnity Insurance Review and applied prospectively to contracts entered after that date.

Contracts entered before 10 November 2025 continue on the previous BII terms (lower cover, lower trigger, no development-approval link).

Common law claims separately

Beyond BII, an owner can pursue common law claims against the builder personally or against directors and shadow directors under general commercial law. Section 32 statutory warranty claims are independent of the BII claim and can proceed even where BII has not been triggered.

How SA compares

SA at $250,000 (from 10 November 2025) sits mid-range. NSW HBCF: $340,000. VIC Home Warranty from 1 July 2026: $400,000 first resort. QLD QHWS: $200,000 per category. WA HII: $200,000. ACT: $200,000. NT Fidelity Fund: up to $200,000. Tasmania: no scheme.

SA's government-provider model (SAFA) is unique. Every other jurisdiction uses either a private insurer, a QBCC-administered scheme or a fidelity fund model. The government-provider structure has stable pricing but concentrates all risk on SAFA's balance sheet.