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Builder put on notice over insurance breach

29 October 2019

South Australia’s consumer watchdog has put an Adelaide builder on notice, after his business initially failed to secure indemnity insurance for 17 residential properties.

City Builders has entered into a written assurance with Consumer and Business Services after allegedly commencing work on the properties without securing the necessary insurance.

Commissioner for Consumer Affairs Dini Soulio said building indemnity insurance was an important protection for consumers.

“Insurance of this nature ensures that if – for whatever reason – a builder is unable for fulfil their contractual obligations, the consumer is protected and will still get what they paid for,” he said.

“That’s why it’s built into the law that building contractors working on projects over $12,000 which require development approval are required to take out insurance before work commences.

“While City Builders’ conduct was of concern, they worked to address the problem quickly once Consumer and Business Services had brought it to their attention.

“If the business had not responded so swiftly to the issue, there was a very real prospect that they would have faced prosecution and potentially disciplinary action.”

Following Consumer and Business Services’ intervention, City Builders has committed to ensuring insurance policies are taken out before performing any future domestic building work.

A written Assurance is a formal undertaking that, in certain circumstances, may be used in place of enforcement action such as prosecution or disciplinary action.

Failure to comply with an Assurance could make the trader liable to prosecution.

“I would encourage any consumers to check that their builder has taken out the necessary insurance before work commences,” Mr Soulio said.

Any consumers with concerns about a builder’s conduct can contact CBS on 131 882.