Perth Construction Firm Penalised for Insurance Lapse

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

In Western Australia, legislation mandates that builders obtain a Home Indemnity Insurance (HII) policy for any residential construction projects exceeding $20,000 prior to receiving payment or commencing with construction.

This insurance offers homeowners a safeguard against financial setbacks should a builder be unable to finish or rectify construction due to reasons such as death, disappearance, financial insolvency, or the revocation of the builder's registration due to financial reasons.

The Armadale Magistrates' Court heard the case where DBD Developments had proceeded with laying the concrete foundation and other preliminary installations for a client's two-storey home in January 2022. However, the requisite HII was not procured until six months later, in July.

Saj Abdoolakhan, the Building Commissioner, highlighted the homeowner's dilemma, noting that two interim payments had been made in the absence of insurance protection.

He stated, "The builder was eligible for this insurance and should have obtained it before commencing work, rather than six months later. This conduct undermines the protections provided by WA’s home building contract laws and the overall integrity of the building approvals process."

This incident resonates amidst ongoing reviews in the construction sector focusing on enhancing compliance and safeguarding consumer interests, as highlighted in the original report from Armadale News.

Instances like these underline the crucial importance of transparency and adherence to legal obligations in the construction industry, particularly in protecting homeowners from potential financial vulnerabilities.

The case serves as a potent reminder for builders across the region to prioritise due diligence and adhere to statutory regulations to maintain trust and uphold industry standards.

The penalty not only enforces existing laws but also signals to other builders the serious repercussions of bypassing essential mandates that protect both builders and clients alike.

Published:Tuesday, 11th Feb 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

Suncorp Enhances Financial Resilience with AU$2.4 Billion Reinsurance Agreement

12 Jun 2026: Paige Estritori

Suncorp, a leading Australian insurer, has recently secured a substantial reinsurance agreement valued at AU$2.4 billion over a five-year period. This strategic move is designed to bolster the company's financial resilience and stability in the face of increasing natural hazard costs and a competitive insurance market. - read more

APRA Enforces AU$2 Million Capital Add-On for Sovereign Insurance Australia

12 Jun 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has recently imposed an additional AU$2 million capital requirement on Sovereign Insurance Australia (SIA). This decision comes in response to identified deficiencies in SIA's risk management framework and operational risk management practices. - read more

Mecon Enhances Construction Insurance Coverage to $120 Million

12 Jun 2026: Paige Estritori

In a significant development for Australia's construction industry, Mecon, a specialist in construction insurance, has announced an increase in its underwriting capacity. Effective from March 10, 2026, Mecon now offers coverage up to $120 million for single projects under its material damage and public liability policy sections. This marks a substantial rise from the previous limit of $50 million. - read more

Mirabelle Unveils Lloyd's-Backed Insurance for Australia's Renewable Energy Sector

12 Jun 2026: Paige Estritori

Mirabelle Underwriting, a specialist in construction and engineering insurance, has launched a new product tailored for renewable energy operations in Australia. This initiative, backed by Lloyd's capacity, aims to address the specific risks associated with the rapidly expanding renewable energy sector. - read more

ASIC Initiates Legal Action Against RACQ for Misleading Renewal Notices

12 Jun 2026: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings against the Royal Automobile Club of Queensland (RACQ), alleging that the insurer disseminated more than 500,000 misleading insurance renewal notices to its customers. This action underscores the regulator's commitment to ensuring transparency and fairness within the insurance sector. - read more

Click for more Insurance News