As the builder, you inspected and approved everything. So you wear everything.
You're the one who signs off on the site, the subcontractors, and the finished job. When something goes wrong, whether it's a trade's mistake, a material that didn't perform, or your own advice on the plans, the claim tends to land on the builder first. Cover that matches the amount of risk you're actually carrying.
Where a builder actually gets exposed
As head contractor, you're carrying three separate kinds of liability that most trades only carry one of: injury and damage on site, defects in the finished building, and the advice and decisions that went into how it was built.
The subcontractor's defect becomes your problem
A tiler you engaged does substandard waterproofing in a bathroom. The leak isn't discovered until months after handover, by which point it's damaged the ceiling below. As head contractor, the owner comes to you first, not the tiler.
The site injury on an unoccupied build
A delivery driver drops off materials at a site mid-build, wanders past unfenced excavation work, and falls. The site was yours to control access to, and the claim follows the person responsible for the site.
The material or design advice that didn't hold up
You recommend a facade material to keep the build on budget. Years later it's found not to meet fire compliance for the building type, and the owner is facing a costly remediation. Your advice on materials is part of what's being questioned.
Who's going to ask you for it
Licensing bodies gate this, not just contracts
Builder insurance isn't only a contractual box to tick. In several states, professional indemnity is close to a condition of holding a builder's licence, particularly since combustible cladding became a live compliance issue:
- State licensing bodies increasingly require PI as part of registration, sometimes without exclusions for cladding-related work.
- Financiers and developers on larger jobs set their own minimum limits before releasing funds.
- Clients and their conveyancers commonly ask for a certificate of currency before settlement.
The exclusion builders assume is covered
"I'm a builder, not a consultant" is the assumption that catches people out. Every time you recommend a material, sign off on a variation, or manage the sequence of trades, you're giving advice, and advice that goes wrong is a professional indemnity claim, not a public liability one. Plenty of builders carry public and product liability and stop there, without realising the advice side of the job is a separate exposure.
Common questions
I've got public liability. Isn't that enough?
Not for everything you're exposed to as head contractor. Public liability answers injury and property damage claims. It doesn't answer a claim that the finished building was defective, or that your advice on materials or design was wrong. Those need product liability and professional indemnity respectively.
A subcontractor caused the defect, not me. Why am I liable?
As the party who inspected and approved the work, you're the first point of contact for the claim even where the underlying fault sits with a subcontractor. You can pursue them separately, but the initial claim usually comes to you.
Is professional indemnity actually required to hold my licence?
In some states, yes, increasingly without exclusions for combustible cladding or similar materials. Check your state's licensing requirements, or ask us and we'll confirm what applies to you.
What's the difference between product liability and professional indemnity for a builder?
Product liability covers defects in the physical work: non-conforming materials, poor workmanship, structural issues. Professional indemnity covers the advice and decisions behind the build: material selection, design input, contract administration.
I only do small renovations, not new builds. Do I need all three covers?
Likely still yes, in smaller limits. Even a small renovation involves site risk, workmanship risk, and some level of advice to the client. Tell us the scale of your work and we'll size the cover to it.