SPECIAL
Victoria Government Gazette
No. S 95 Wednesday 28 February 2024
By Authority of Victorian Government Printer
Building Act 1993
DOMESTIC BUILDING INSURANCE MINISTERIAL ORDER
PART 1 – INTRODUCTORY
1. Purposes of this Order
(1) This Order species the circumstances in which, and the kinds and amounts of
insurance that a builder is required to be covered by before carrying out domestic
buildingworkunderamajordomesticbuildingcontract.
(2) This Order species the insurance that a person who constructs a building and to
whomsection137BoftheBuilding Act 1993 applies,isrequiredtobecoveredby
beforeenteringintoacontracttosellthatbuilding.
2. Authorising provisions
ThisOrderismadeundersections135,137Aand137DoftheBuilding Act 1993.
3. Commencement
ThisOrdertakeseecton29March2024.
4. Revocation
TheDomesticBuildingInsurance MinisterialOrdermadeon22May2003andpublished
inGovernmentGazetteNo.S98dated23May2003andtheDomesticBuildingInsurance
MinisterialOrdermade on28May2014andpublishedinGovernmentGazetteNo.G22
dated29May2014arerevoked.
5. Interpretation
(1) InthisOrder–
‘Authority’ meanstheVictorianBuildingAuthorityestablishedbysection193ofthe
Building Act 1993;
‘BCA Volume One’ hasthesamemeaningasithasinregulation5(1)oftheBuilding
Regulations2018;
‘builder’ hasthesamemeaningasithasinsection3(1)oftheDomestic Building
Contracts Act 1995;
‘building owner’ hasthesamemeaningasit has in section 3(1) of the Domestic
Building Contracts Act 1995;
‘building site’ hasthesamemeaningasithasinsection3(1)oftheDomestic Building
Contracts Act 1995;
‘commencement day’ meanstheearlierof–
(a) thedatethattherelevantdomesticbuildingcontractisenteredinto;or
(b) thedateofissueofthebuildingpermitfortherelevantdomesticbuildingwork;
‘completion date’ means–
(a) thedateofissueoftheoccupancypermitinrespectofthebuilding(whetheror
nottheoccupancypermitissubsequentlycancelledorvaried);or
(b) if an occupancy permit is not issued, the date of issue under Part 4 of the
Building Act 1993 ofthecerticateofnalinspectionofthebuildingworkfor
theconstructionofthebuilding;or
(c) ifneitheranoccupancypermitnoracerticateofnalinspectionisissuedor
requiredtobeissued,thedateofpracticalcompletionofthedomesticbuilding
work;
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‘construct’ hasthesamemeaningasithasinsection3(1)oftheBuilding Act 1993;
‘consumer law provision’ meanssections18,29,34,51,52,54,55,60,61and63
ofSchedule2totheCompetition and Consumer Act 2010oftheCommonwealth;
‘date of practical completion’ hasthesamemeaningasithasinsection45(6)ofthe
Domestic Building Contracts Act 1995;
‘defective’hasthesamemeaningasithasinsection3(1)oftheDomestic Building
Contracts Act 1995;
‘developer’ meansanybuildingownerorotherpersonforwhomthreeormorehomes
arebeingorareproposedtobebuilt–
(a) onanyonebuildingsite;or
(b) onmorethanonebuildingsiteunderonedomesticbuildingcontract;
‘disappears’ meanscannotbefoundafterduesearchandinquiry;
‘domestic building contract’ hasthesamemeaningasithasinsection3(1)ofthe
Domestic Building Contracts Act 1995;
‘domestic building work’ has the same meaning as it has in section 3(1) of the
Domestic Building Contracts Act 1995;
‘home’ hasthesamemeaningasithasinsection3(1)oftheBuilding Act 1993;
‘Homes Victoria’ hasthesamemeaningasithasinsection4(1)oftheHousing Act 1983;
‘insolvent’ means–
(a) inthecaseofanaturalperson,insolventunderadministrationasthatexpression
isdenedinsection9oftheCorporations Act 2001oftheCommonwealth;or
(b) inthecaseofabodycorporate,subjecttoexternaladministrationunderthe
Corporations Act 2001oftheCommonwealth;
‘insurable contract of sale’ meansacontractofsaleinrelationtoabuildingtowhich
section137BoftheBuilding Act 1993 applies,wheredomesticbuildingworkwas
carriedoutonthebuildingbeforethesaleandthevalueofthatworkexceeded$16,000
atthetimeitwascarriedout;
‘insurable domestic building contract’ meansadomesticbuildingcontractinwhich
thecostofthedomesticbuildingworkismorethan$16,000;
‘insured’ means–
(a) inthecaseofapolicyissuedpursuanttoPart2–
(i) anypersoninsuredunderthepolicy;and
(ii) any person to whom the cover under the policy extends pursuant to
clause11;and
(b) inthecaseofapolicyissuedpursuanttoPart3–
(i) anypersoninsuredunderthepolicy;and
(ii) any person to whom the cover under the policy extends pursuant to
clause22–
but,unlessexpresslyprovidedforinthepolicy,doesnotinclude–
(c) inthecaseofapolicyissuedpursuanttoPart2–
(i) thebuilder;or
(ii) thebuildingowner,ifthebuildingownerisarelatedbodycorporate
(as dened in section 9 of the Corporations Act 2001 of the
Commonwealth)ofthebuilder;or
(iii) the building owner, if neither the builder nor the building owner
is a public company but each has a common director or a common
shareholder;or
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(d) inthecaseofapolicyissuedpursuanttoPart3–
(i) theownerbuilder;or
(ii) thepurchaser,ifthepurchaserisarelatedbodycorporate(asdenedin
section9oftheCorporations Act 2001oftheCommonwealth)ofthe
ownerbuilder;or
(iii) thepurchaser,ifneitherthepurchasernortheownerbuilderisapublic
companybuteachhasacommondirectororacommonshareholder;
‘major domestic building contract’ hasthesamemeaningasithasinsection3(1)of
theDomestic Building Contracts Act 1995;
‘multi-storey residential building’ meansabuilding–
(a) thathasariseinstoreysofmorethanthree;and
(b) thatcontainstwoormoreseparatedwellings;
‘non-structural defect’ in relation toabuilding, means a defectinbuilding work
otherthanastructuraldefect;
‘owner builder’ inrelationtoabuilding,means–
(a) apersontowhomsection137BoftheBuilding Act 1993 applies;or
(b) amortgageeinpossessionofthebuildingfromthatperson;or
(c) theexecutororadministratoroftheestateofthatperson;
‘policy’ meansacontractofinsurance;
‘practical completion date’ inrelationto domesticbuildingwork,meansthe date
whenthedomesticbuildingworkiscompletedexceptforanyomissionsordefects
that do not prevent the domestic building work from being reasonably capable of
beingusedforitsintendedpurpose;
‘Revoked Order’ means–
(a) theDomesticBuildingInsuranceMinisterialOrdermadeon29October1998
andpublishedintheGovernmentGazetteon30October1998asamendedby
theDomesticBuildingInsurance(Amendment)MinisterialOrdermadeon9
November1998andpublishedintheGovernmentGazetteon12November
1998;and
(b) theDomesticBuildingInsuranceMinisterialOrdermadeon16May2002and
publishedintheGovernmentGazetteNo.S82dated20May2002;and
(c) theDomesticBuildingInsuranceMinisterialOrdermadeon22May2003and
publishedinGovernmentGazetteNo.S98dated23May2003asamendedby
theDomesticBuildingInsuranceMinisterialOrdermadeon28May2014and
publishedinGovernmentGazetteNo.G22dated29May2014.
‘rise in storeys’ hasthesamemeaningasithasinBCAVolumeOne;
‘storey’ hasthesamemeaningasithasinBCAVolumeOne,butdoesnotincludeaspace
withinabuildingifthespacecontainsonlyaccommodationintendedonlyforvehicles;
‘structural defect’ inrelationtoabuilding,meansanydefectinastructuralelement
ofthebuildingthatisattributabletodefectivedesign,defectiveorfaultyworkmanship
ordefectivematerials(oranycombinationofthese)andthat–
(a) resultsin,orislikelytoresultin,thebuildingoranypartofthebuildingbeing
requiredbyorunderanylawtobeclosedorprohibitedfrombeingused;or
(b) prevents,orislikelytoprevent,thecontinuedpracticaluseofthebuildingor
anypartofthebuilding;or
(c) resultsin,orislikelytoresultin–
(i) thedestructionofthebuildingoranypartofthebuilding;or
(ii) physicaldamagetothebuildingoranypartofthebuilding;or
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(d) results in, or is likely to result in, a threat of imminent collapse that may
reasonably be considered to cause destruction of the building or physical
damagetothebuildingoranypartofthebuilding;
‘structural element’ inrelationtoabuilding,means–
(a) anyinternalorexternalload-bearingcomponentofthebuildingthatisessential
tothestabilityofthebuildingoranypartofit,including(butnotlimitedto),
foundations,oors,walls,roofs,columnsandbeams;or
(b) any component (including weatherproong) that forms part of the external
wallsorroofofthebuilding;
‘Tribunal’ meanstheVictorianCivilandAdministrativeTribunalestablishedbythe
Victorian Civil and Administrative Tribunal Act 1998.
(2) InthisOrder,incalculatingthenumberofhomesthatarebeingbuiltorproposedto
bebuiltforthepurposesofdeterminingwhetherabuildingownerorotherpersonis
a developer, a home which is or is to be the principal place of residence of that
buildingownerorpersonistobedisregarded.
PART 2 – DOMESTIC BUILDING CONTRACTS
6. To which contracts does this Part apply?
ThisPartappliestoaninsurabledomesticbuildingcontract.
7. Required insurance
Abuilderwhohasenteredintoaninsurabledomesticbuildingcontractmustensurethata
policyisissuedthatcomplieswiththisOrder(exceptPart3).
8. Indemnity for loss
(1) Thepolicymustindemnifythebuildingownerinrespectoflossordamageresulting
fromnon-completionofthedomesticbuildingwork.
(2) The policy must also indemnify the building owner in respect of loss or damage
resultingfromalloranyofthefollowingevents–
(a) domesticbuildingworkthatisdefective;
(b) a breach of any warranty implied into the domestic building contract by
section8oftheDomestic Building Contracts Act 1995;
(c) afailuretomaintainastandardorqualityofdomesticbuildingworkspecied
inthedomesticbuildingcontract;
(d) conductbythebuilderinconnectionwiththedomesticbuildingcontractthat
contravenesaconsumerlawprovision.
(3) Thepolicymayprovidethattheindemnityreferredtoinsub-clause(1)or(2)only
appliesifthebuilderdies,becomesinsolventordisappears.
Note:Thewarrantiesreferredtoinclause8(2)(b)areasfollows–
(a) the builder warrants that the work will be carried out in a proper and
workmanlikemannerandinaccordancewiththeplansandspecicationsset
outinthecontract;
(b) thebuilderwarrantsthatallmaterialstobesuppliedbythebuilderforusein
theworkwillbegoodandsuitableforthepurposeforwhichtheyareusedand
that,unlessotherwisestatedinthecontract,thosematerialswillbenew;
(c) thebuilderwarrantsthattheworkwillbecarriedoutinaccordancewith,and
willcomplywith,alllawsandlegalrequirementsincluding,withoutlimiting
the generality of this warranty, the Building Act 1993 and the regulations
madeunderthatAct;
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(d) the builder warrants that the work will be carried out with reasonable care
andskillandwillbecompletedbythedate(orwithintheperiod)speciedby
thecontract;
(e) thebuilderwarrantsthatiftheworkconsistsoftheerectionorconstructionofa
home,orisworkintendedtorenovate,alter,extend,improveorrepairahome
toastagesuitableforoccupation,thehomewillbesuitableforoccupationat
thetimetheworkiscompleted;
(f) if the contract states the particularpurpose forwhich the work is required,
or the result which the building owner wishes the work to achieve, so as
to show that the building owner relies on the builder’s skill and judgment,
thebuilderwarrantsthattheworkandanymaterialusedincarryingoutthe
workwillbe reasonablytfor thatpurposeorwillbeofsuchanatureand
qualitythattheymightreasonablybeexpectedtoachievethatresult.
9. Additional insurance
(1) Thepolicymustalsoindemnifythebuildingownerinrespectoflossofthedeposit
(or any part of the deposit) or loss of any progress payment under the insurable
domesticbuildingcontract.
(2) Thepolicymustalsoindemnifythebuildingownerinrespectofthecostsofalternative
accommodationandremoval and storagecosts that arereasonablyand necessarily
incurredsubsequenttoandasaresultofanyofthefollowingevents–
(a) thenon-completionofthedomesticbuildingwork;
(b) aneventreferredtoinclause8(2).
(3) Thepolicymayprovidethattheindemnityreferredtoinsub-clause(1)or(2)only
appliesifthebuilderdies,becomesinsolventordisappears.
(4) Despitesub-clause(2),thepolicymayexcludeorlimitclaimsforlossreferredtoin
thatsub-clausetotheextentthattheperiodofalternativeaccommodationorstorage
exceeds60days,excludinganyperiodorperiodsofdelayattributabletotheinsurer.
(5) Nothinginclauses13to17appliestopermitapolicytolimitorrestricttheindemnity
requiredbythisclause.
10. Policy to state that indemnity extends to acts or omissions of others
Thepolicymuststatethattheindemnitiesreferredtoinclauses8and9includeanindemnity
in respect of the acts or omissions of all persons who were contracted by the builder to
performthedomesticbuildingworkundertheinsurabledomesticbuildingcontractresulting
inlossordamageofthekindreferredtoinclause8or9.
11. To whom does the cover extend?
(a) Therequiredinsurancecoverinthepolicymustextend–toeachpersonwhobecomes
entitledtothebenetofanyofthewarrantiesreferredtoinclause8(2)(b);and
(b) totheownerforthetimebeingofthebuildingorlandinrespectofwhichthedomestic
buildingworkisorwasbeingcarriedout.
12. Period of insurance
(1) Thepolicymustprovidetheindemnitiesreferredtoinclauses8and9inrelationto
non-structural defects in respect of loss or damage occurring during the period
commencingonthecommencementdayandendingnotearlierthantwoyearsafter
theearlierof–
(a) thecompletiondateofthedomesticbuildingwork;and
(b) thedateofterminationoftherelevantdomesticbuildingcontract.
6 S 95 28 February 2024 Victoria Government Gazette
(2) Thepolicymustprovidetheindemnitiesreferredtoinclauses8and9inrespectofall
otherlossordamageoccurringduringtheperiodcommencingonthecommencement
dayandendingnotearlierthansixyearsaftertheearlierof–
(a) thecompletiondateofthedomesticbuildingwork;and
(b) thedateofterminationoftherelevantdomesticbuildingcontract.
13. Penalties for delay by builder
(1) Thepolicymayexcludeorlimitclaimsunderthepolicyforpenalties,nes,liquidated
damagesorothersums,ifanyoftheserelatetodelayonthepartofthebuilder.
(2) Despitesub-clause(1),thepolicymustnotexcludeorlimitanyincreaseinrectication
costscausedbytheeuxionoftime.
14. Excessive payments to builder
The policy may exclude or limit claims under the policy for money paid to a builder
that exceeds the amounts that should have been paid to the builder in accordance with
section11and(asthecaserequires)section40(2)orsection40(3)orsection40(4)ofthe
Domestic Building Contracts Act 1995.
15. Builder dies, disappears etc. before work begins
(1) The policy may exclude or limit claims under the policy for non-completion of
domestic building work if the death, insolvency or disappearance of the builder
occursbeforethebuildercommencesonthebuildingsiteanydomesticbuildingwork
(otherthantheremovalofvegetation)thatrequirestheuseofanytoolsorbuilding
materials.
(2) Anexclusionorlimitationreferredtoinsubclause(1)mustbesubjecttoarightofthe
buildingownertorecover–
(a) anymoneypaidinrelationtothedomesticbuildingcontract;and
(b) allreasonablecostsandexpensesincurredbythebuildingownerinrelationto
thecontract.
16. Claims by developers
(1) Thepolicymayexcludeorlimitclaimsunderthepolicybyabuildingownerwhoisa
developerfornon-completionofdomesticbuildingwork.
(2) Anexclusionorlimitationundersub-clause(1)mustnotaectanyrightsunderthe
policyofanysubsequentownerforthetimebeingofthebuildingorlandinrespectof
whichthedomesticbuildingworkisbeingcarriedout.
17. Maximum liability for non-completion claims
Thepolicymaylimitclaimsunderthepolicyfornon-completionofdomesticbuilding
worktoanamountthatisnotmorethan20%ofthecontractpriceundertheinsurable
domesticbuildingcontract.
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PART 3 – OWNER BUILDERS
18. To which contracts does this Part apply?
ThisPartappliestoaninsurablecontractofsale.
19. Required insurance
Anownerbuilderwhohasenteredintoaninsurablecontractofsalemustensurethatapolicy
isissuedthatcomplieswiththisOrder(exceptPart2).
20. Indemnity for loss
(1) The policy must indemnify the purchaser under a contract of sale in respect of
lossordamage arisingfromabreach ofanywarrantyimpliedintothecontractby
section137CoftheBuilding Act 1993.
(2) Thepolicymayprovidethattheindemnityreferredtoinsub-clause(1)onlyappliesif
theownerbuilderdies,becomes insolventordisappears.
Note:Thewarrantiesreferredtoinclause20(1)areasfollows–
(a) thevendorwarrantsthatalldomesticbuildingworkcarriedoutinrelationto
theconstructionbyoronbehalfofthevendorofthehomewascarriedoutina
properandworkmanlikemanner;and
(b) thevendorwarrantsthatallmaterialsusedinthatdomesticbuildingworkwere
goodandsuitableforthepurposeforwhichtheywereusedandthat,unless
otherwisestatedinthecontract,thosematerialswerenew;and
(c) the vendor warrants that that domestic building work was carried out in
accordancewithalllawsandlegalrequirements,including,withoutlimiting
the generality of this warranty, the Building Act 1993 and the regulations
madeunderthatAct.
21. Additional insurance
(1) Thepolicymustalsoindemnifythepurchaserinrespectofthecostsofalternative
accommodationandremoval and storagecosts that arereasonablyand necessarily
incurred subsequent to and as a result of a breach of any warranty referred to in
clause20(1).
(2) Thepolicymayprovidethattheindemnityreferredtoinsub-clause(1)onlyappliesif
theownerbuilderdies,becomesinsolventordisappears.
(3) Nothing in clause 24 applies to permit a policy to limit or restrict the indemnity
requiredbythisclause.
22. To whom does the cover extend?
Therequiredinsurancecoverinthepolicymustextend–
(a) toeachpersonwhobecomesentitledtothebenetofanyofthewarrantiesreferredto
inclause20(1);and
(b) toanypersonwhoisthesuccessorintitletothepurchaser;and
(c) ifthedomesticbuildingworkiscarriedoutonlandinaplanofsubdivisioncontaining
commonproperty,theownerscorporationinrelationtothatlandorabuildingonthat
land.
23. Period of insurance
(1) Thepolicymustprovidetheindemnitiesreferredtoinclauses20and21inrelation
to non-structural defects in respect of loss or damage occurring during the period
commencingonthedateofthecontractofsaleandendingnotearlierthantwoyears
afterthecompletiondateforthedomesticbuildingwork.
(2) Thepolicymustprovidetheindemnitiesreferredtoinclauses20and21inrespectof
allotherlossordamageoccurringduringtheperiodcommencingonthedateofthe
contractofsaleandendingnotearlierthan6yearsafterthecompletiondateforthe
domesticbuildingwork.
8 S 95 28 February 2024 Victoria Government Gazette
24. Defects referred to in condition report
Thepolicymayexcludeorlimitclaimsunderthepolicyinrespectofanydefectorincomplete
domesticbuildingworkthatisreferredtointhereportrequiredtobeprovidedtoapurchaser
pursuanttosection137BoftheBuilding Act 1993.
PART 4 – ADDITIONAL POLICY PROVISIONS
Division 1 – Mandatory Provisions
25. Purpose of this Division
ThisDivisionsetsoutprovisionsthatapolicyrequiredunderPart2orPart3mustcontain.
26. Policy to comply with Order
Thepolicymustcontainaprovisiontotheeectthatthepolicyisissuedincompliancewith
thisOrderandifanytermofthepolicyconictsorisinconsistentwiththisOrderthenthe
policymustbereadandbeenforceableasifitcomplieswiththisOrder.
27. InsurertoacceptndingsofTribunal
Thepolicymustcontainaprovisiontotheeectthatiftheinsurerhasnoticeoftherelevant
proceedingsbeforetheTribunal,theinsurerwillacceptasdeterminativeoftheissuesany
ndingmadebytheTribunal–
(a) astowhetheranyofthefollowingeventshasoccurred–
(i) thenon-completionofdomesticbuildingwork;
(ii) aneventreferredtoinclause8(2);
(iii) abreachofwarrantyreferredtoinclause20;
(iv) aneventreferredtoinclause8or20;and
(b) ifso,astotheamountoflossordamagesueredbythebuildingowneror
purchaser,asthecasemaybe,asaresultoftheeventorevents.
28. Restrictions on avoidance of policy
(1) Thepolicymustcontainaprovisiontotheeectthattheinsurermaynotavoidthe
policyorrefusetomakeorreduceanypaymentunderthepolicyonthegroundthat–
(a) thebuilderorownerbuilder,asthecasemaybe–
(i) breachedanydutyoftheutmostgoodfaith;or
(ii) failedtocomplywithanydutyofdisclosure;or
(iii) maderepresentationstotheinsurer;or
(iv) failedtocomplywithaprovisionorrequirementofthepolicy;or
(v) by act or omission ofany description prejudiced the interests of the
insurer;or
(b) thepremiumoranyinstalmentofthepremiumhasnotbeenpaid.
(2) The policy may provide that if an insurer makes a payment under a policy in
circumstancestowhichthisclauseapplies,theinsurerisentitledtorecoverfromthe
builderorownerbuilder,asthecasemaybe,anyamountsopaid.
29. Time for determination of claim
Thepolicymust contain aprovision to theeect that iftheinsurer has notdetermined a
writtenclaimastoliabilitywithin90daysofreceiptoftheclaim,then,unlesstheinsurer
obtainsanextensionoftimefromtheinsuredortheTribunal,theinsureristobedeemedto
haveacceptedliabilityfortheclaim.
30. Notice of defect
Thepolicymustcontainaprovisiontotheeectthatifapersongivestheinsurernoticeofa
defect,thatpersonistobetakenforthepurposesofthepolicytohavegivennoticeofevery
defecttowhichthedefectnotiedisdirectlyorindirectlyrelated,whetherornottheclaimin
respectofthedefectthatwasactuallynotiedissettled.
Victoria Government Gazette S 95 28 February 2024 9
31. Application of section 54 of the Insurance Contracts Act 1984
(1) Thepolicymustcontainaprovisiontotheeectthattheinsureracknowledgesthat
section54oftheInsurance Contracts Act 1984 (insurermaynotrefusetopayclaims
incertaincircumstances)oftheCommonwealthappliesorisdeemedtoapplytothe
policy.
(2) Thepolicymustcontainaprovisiontotheeectthat,despitetheprovisionreferred
toinsub-clause(1),ifthepersonmakingaclaimagainstaninsurerhasnotiedthe
insurerinwriting,within180daysafterthedatewhentheclaimantrstbecameaware,
or might reasonably be expected to become aware, of thedeath,disappearance or
insolvencyoftheinsured,thentheinsurerwillnotrelyonsection54oftheInsurance
Contracts Act 1984 toreduceitsliabilityunderthepolicyortoreduceanyamount
otherwisepayableinrespectofaclaimmadebyreasononlyofanydelayinaclaim
beingnotiedtotheinsurer.
32. Insurer to notify Authority
ThepolicymustcontainaprovisiontotheeectthattheinsurerwillnotifytheAuthorityat
thetimesandinthemanneragreedwiththeAuthority,intheeventthat–
(a) abuilderisrefusedinsurance,ceasestobeeligibletoreneworprocureinsuranceor,
inrespectofdomesticbuildingworkperformedpriortothecommencementofthis
Order,failstopurchaseormaintainrequiredinsurance;and
(b) any claim under a policy of requiredinsurance issettled or paid by agreement or
otherwise.
33. CerticateofInsurance
ThepolicymustcontainaprovisiontotheeectthattheinsurermustprovideaCerticateof
Insurance,intheformortotheeectoftheformcontainedineitherSchedule1orSchedule2
to this Order (as the case may require) and evidencing that a policy has been issued in
compliancewiththisOrderinrespectofeachhomeforwhichinsuranceisrequired–
(a) totheinsuredimmediatelyontheissueofthepolicy;and
(b) onrequestbythebuilder,ownerbuilderorinsuredatanytime.
Division 2 – Allowable Exclusions and Limitations
34. Purpose of this Division
ThisDivisionsetsoutprovisionsthatapolicyrequiredunderPart2orPart3maycontain.
35. Policy may impose limitations on total amount payable
Thepolicymay limittheliability oftheinsurer to notless than theaggregate amount of
$300,000forall claimsinrespect of anyone home, includingreasonable legal costsand
expensesincurredbytheinsured(notbeingthebuilderorownerbuilder)associatedwiththe
successfulclaimagainsttheinsurer.
36. Policy may limit cover for certain external works
(1) Thepolicy mayexcludeor limitcover forloss or damagerelating tolandscaping,
paving,retainingstructures,drivewaysorfencing.
(2) Thepolicymustnotexcludeorlimitcoverundersub-clause(1)inrelationtoworksif
thoseworks–
(a) areintegraltotheconstructionofabuilding;or
(b) requiretheissueofabuildingpermitundertheBuilding Act 1993;or
(c) couldresultinwaterpenetrationoforwithinabuilding;or
(d) couldadverselyaecthealthorsafety;or
(e) adverselyaectthestructuraladequacyofabuilding;or
(f) arenotcompletedandthebuilderhasdied,becomeinsolventordisappeared.
10 S 95 28 February 2024 Victoria Government Gazette
37. Exclusion concerning fair wear and tear
Thepolicymayexcludeorlimitcoverforlossordamageduetofairwearandtearofthe
domesticbuildingworkorthefailurebytheinsuredtomaintainthatwork.
38. Limitation relating to contravention of consumer law provision
Thepolicymaylimittheindemnityprovidedbytheinsurerforlossordamagearisingfrom
conductofabuilderthatcontravenesaconsumerlawprovisiontothecostofrectifyingthe
relevantdomesticbuildingwork.
39. Requirements on insured
(1) Thepolicymayrequiretheinsuredonmakingaclaimunderthepolicy–
(a) to comply with any reasonable directions of the insurer in relation to the
completionorrecticationofthedomesticbuildingwork;
(b) not to undertake or cause to be undertaken any rectication works without
notifyingtheinsurer,unlessthoseworksarereasonablynecessarytoprevent
orminimiseanyfurtherlossordamage;
(c) subjecttosub-clause(2),toprovidetheinsureroranybuilderorotherperson
nominatedorapprovedbytheinsurerwithreasonableaccesstotherelevant
buildingsiteforthepurposeofinspection,recticationandcompletionofthe
domesticbuildingwork.
(2) Thepolicymustprovidethattheinsuredhastherightonreasonablegrounds(including
loss of condence in the builder) to refuse to provide the access referred to in
sub-clause(1)(c)toabuildernominatedorapprovedbytheinsurer.
(3) Despitesub-clause(1),thepolicymustprovidethat theinsurermaynot reduceits
liabilitytotheinsuredbyreasonofafailureonthepartoftheinsuredtocomplywitha
requirementimposedpursuanttothatsub-clauseunlessandonlytotheextentthatthe
insurercanprovethatthefailureincreasedtheliabilityoftheinsurerunderthepolicy.
40. Claimsaectingcommonproperty
Thepolicymayprovidethatif–
(a) domestic building work is carried out on land in aplan of subdivision containing
commonproperty;and
(b) aclaimispaidbytheinsurerinrelationtothecommonproperty–
thentheamountofcoverinrespectofanyonehomeonlandintheplanofsubdivisionistobe
reducedbynotmorethananamountcalculatedbydividingtheamountpaidundertheclaim
bythenumberofhomesonlandintheplanofsubdivision.
41. Right of subrogation
Thepolicymayprovidethattheinsurerisentitledtobesubrogatedtotherightsoftheinsured
totheextentofanyamountpaidbytheinsurertotheinsured.
42. Precautions to minimise loss
The policy may provide that the insured must take reasonable precautions to avoid or
minimiselossordamagecoveredbythepolicy.
43. Limitation on renewal
Thepolicymaystatethatthepolicywillnotberenewedandisofakindthatitisnotusual
torenew.
44. Limitation periods for making claims
Thepolicymayincludeaprovisionunderwhichtheinsurermayrefusetoacceptaclaimthat
isnotmadewithin180daysafterthedateonwhichtheclaimantrstbecameaware,ormight
reasonablybeexpectedtohavebecomeaware,ofthedeath,disappearanceorinsolvencyof
theinsured.
Victoria Government Gazette S 95 28 February 2024 11
Division 3 – Excess
45. Purpose of this Division
ThisDivisionsetsoutprovisionsrelatingtoexcessthatapolicyrequiredunderPart 2or
Part3maycontain.
46. Allowable excess
(1) Thepolicymayincludeaprovisionwhichrequirestheinsured(notbeingthebuilder
ortheownerbuilder)tobearattheinsured’sownrisk–
(a) anexcessofnotmorethan$1000inrespectofaclaimmadeafterveyears
afterthecompletiondate;
(b) anexcessofnotmorethan$750inrespectofaclaimmadebetweenthreeand
veyearsafterthecompletiondate;
(c) anexcessofnotmorethan$500inrespectofaclaimmadebetween12months
andthreeyearsafterthecompletiondate;
(d) a claim under $500 made between three months and 12 months after the
completiondate.
(2) Thepolicymustprovidethatforthepurposesofsub-clause(1)aclaimof$500or
moremayrelatetomorethanonedefectiftheamountclaimedforanyoneormore
defectsislessthan$500.
(3) Forthepurposeofthisclause,thedatewhenaclaimismadeistheearlierof-
(a) thedatewhentheclaimantrstnotiestheinsurerofacircumstancethatmay
giverisetoaclaim;and
(b) thedateaclaimismade.
47. No excess to apply in certain circumstances
(1) Despiteclause46,apolicytowhichPart2appliesmustnotincludeaprovisionthat
requirestheinsuredtobearanexcess–
(a) inrespectoflossordamagearisingbetween–
(i) the date of the insurable domestic building contract or the date of
issueofthe buildingpermitfor therelevantdomestic buildingwork,
whicheveristheearlier;and
(ii) thedatethatisthreemonthsafterthecompletiondate;or
(b) ifthelossordamagerelatestonon-completionofdomesticbuildingwork.
(2) Despite clause 46, a policy to which Part 3 applies must not include a provision
thatrequirestheinsuredtobearanexcessinrespectofanylossordamagearising
betweenthedateoftherelevantcontractofsaleandtheendofthreemonthsafterthe
completiondateiftherelevantcontractofsaleisenteredintobeforetheendofthree
monthsafterthecompletiondate.
48. Only one excess to apply
Despiteclause46,thepolicymustensurethatanexcessmaybeappliedonlyonceinrelation
to–
(a) anyclaimcomprisingmorethanonedefect;or
(b) twoormoreclaimsthatrelatetothesamedefect.
12 S 95 28 February 2024 Victoria Government Gazette
PART 5 – GENERAL
49. Purpose of this Part
ThisPartcontainsgeneralprovisionsrelatingtopoliciesrequiredunderPart2orPart3.
50. Policy not to contain terms inconsistent with this Order
(1) A policy must not contain any provision that limits, modies, varies, avoids or
excludesanyoftherequirementsforapolicysetoutinthisOrder.
(2) Subjecttosub-clause(3),apolicymustnotcontainanyprovisionthatprovidesfor
limitationsorexclusionstothepolicynotexpresslypermittedbythisOrder.
(3) ApolicymayincludeanexclusionorlimitationthatisnotreferredtointhisOrderif
itis–
(a) astandardpolicyprovisionoftheinsurerandrelatestolossordamageincurred
asaresultof–
(i) war;or
(ii) anuclearevent;or
(iii) civilunrest;or
(iv) risks normally insured under a policy for public liability or contract
works;or
(v) asbestoscontaminationorremoval;or
(vi) actofGodornature;or
(vii) failureby the insuredto maintainappropriateprotection againstpest
infestationorexposuretonaturaltimbers;or
(viii) consequentialloss,nototherwisecoveredbythisOrder;or
(ix) malfunction in any mechanical or electrical equipment or appliance
iftheinsurercanprovethatthemalfunctionisnotattributabletothe
workmanshipoforinstallationbythebuilderorownerbuilder;and
(b) nototherwiseinconsistentwith,orcontraryto,anythinginthisOrder.
51. Policy can provide greater cover
AprovisioninapolicywillnotcontraveneorbeinconsistentwiththisOrderbyreasononly
thatit–
(a) provides a greater insurance cover or additional kinds of insurance cover to that
speciedinthisOrder;or
(b) providesforalowerexcessthanthatspeciedinDivision3ofPart4;or
(c) extendscovertopersonsotherthantheinsuredasdenedinthisOrder.
52. Builder can complete work
Iftheinsurer,builderandAuthorityallagree,nothinginthisOrderpreventsabuilderfrom
carryingoutdomesticbuildingworkunderaninsurabledomesticbuildingcontractdespite
thefactthatthebuilderhasbecomeinsolvent,subjecttoanyconditionsthattheAuthority
mayrequire.
53. Provisionsinpolicycanbetolikeeect
IfthisOrder requires orallowsa policy to includea particular provisionorrequirement,
aprovisiontothesameeffectastheprovisionorrequirementwillbesufficient.
Victoria Government Gazette S 95 28 February 2024 13
PART 6 – EXCEPTIONS
54. Exception for domestic building works undertaken by Homes Victoria
ThisOrderdoesnotapplytodomesticbuildingworkwhichiscarriedoutorattemptedtobe
carriedoutbyHomesVictoria.
55. Exception for demolishers
This Order does not apply to a person who is registered under Part 11 of the Building
Act 1993solelyunderthecategoryofbuilder,classofdemolisher.
56. Exception for builders of multi-storey residential buildings
(1) This Order does not apply to a person who carries out or proposes to carry out
domesticbuildingworkunderadomesticbuildingcontractfortheconstructionofa
multi-storeyresidentialbuildinginrespectofthecarryingoutofdomesticbuilding
workfortheconstructionofthatbuilding.
(2) ThisOrderdoesnotapplytoanowner-builderwhoconstructsamulti-storey
residentialbuilding,inrelationtoanycontracttosellthatbuilding.
PART 7 – TRANSITIONAL
57. Transitional
AbuilderorownerbuilderisnotrequiredtocomplywiththisOrderinrespectoftheissue
ofapolicyrelatingtodomesticbuildingworkifthatdomesticbuildingworkiscoveredby
apolicythatwasissuedbeforethecommencementofthisOrderandthatpolicycomplies
withtheRevokedOrder.
14 S 95 28 February 2024 Victoria Government Gazette
SCHEDULES
SCHEDULE 1
Building Act 1993
Section135
DomesticBuildingInsuranceOrderCerticateinrespectof
Insurance Domestic Building Contract
A contract of insurance complying with the Ministerial Order for Domestic Building Insurance
issuedundersection135oftheBuilding Act 1993,namely–
Typeofinsurance
Insurance
hasbeenissuedby:[insert name of insurer]
inrespectof:[insert brief description of domestic building work]
at:[insert address or description of land]
carriedoutby:[insert name of builder]
for:[insert details of building owner ‘the insured’]
Subject to the Building Act 1993, the Domestic Building Contracts Act 1995, the Ministerial
OrderforDomesticBuildingInsuranceandtheconditionsoftheinsurancecontract,coverwillbe
providedtothebuildingownernamedinthedomesticbuildingcontractandtothesuccessorsintitle
tothebuildingowner.
Date:[insert date]
Signedforandonbehalfoftheinsurers:[insert signature]
Victoria Government Gazette S 95 28 February 2024 15
SCHEDULE 2
Building Act 1993
Section135
DomesticBuildingInsuranceOrderCerticateinrespectof
Insurance Contract of Sale
A contract of insurance complying with the Ministerial Order for Domestic Building Insurance
issuedundersection135oftheBuilding Act 1993,namely–
Typeofinsurance
Insurance
hasbeenissuedby:[insert name of insurer]
inrespectof:[insert brief description of domestic building work]
at:[insert address or description of land]
carriedoutby/onbehalfof:[insert name of owner builder]
for:[insert details of purchaser ‘the insured’]
SubjecttotheBuilding Act 1993,theMinisterialOrderforDomesticBuildingInsuranceandthe
conditionsoftheinsurancecontract,coverwillbeprovidedtothepurchasernamedinthecontract
ofsaleandtothesuccessorsintitletothepurchaser.
Date:[insert date]
Signedforandonbehalfoftheinsurers:[insert signature]
Dated28February2024
SONYAKILKENNYMP
MinisterforPlanning
16 S 95 28 February 2024 Victoria Government Gazette
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