NSW Electrical Job Over $20,000: Is $340,000 HBC Cover Required?

For a non-exempt NSW residential electrical job where the electrician is the principal contractor, yes: Service NSW’s guidance dated 9 September 2024 says the contractor must hold at least $340,000 in HBC cover before starting work or taking any money, including a deposit, when the contract price is over $20,000 including GST. The State Insurance Regulatory Authority (SIRA) says in guidance dated 9 July 2026 that the same price trigger applies to residential building work by a principal contractor and that split projects are tested by the total of all contracts. Figures checked 1 October 2026.

Do I need $340,000 of cover for an electrical job over $20,000?

You do if you are the principal contractor and the residential building work is not exempt. The test depends on both your role and the project:

The wording is over $20,000, not $20,000 or more. A contract priced exactly at $20,000 does not meet that stated price test by itself, although the total of multiple contracts or the market-cost estimate may do so.

When is the electrician the principal contractor?

SIRA says a person is generally a principal contractor if they are contracting with:

• A homeowner;
• A developer;
• An owner-builder permit holder, for residential building work covered by the permit; or
• A homeowner where the licensed contractor is carrying out residential building work on land they own, other than under an owner-builder permit.

The contracting relationship matters more than whether an electrician physically performs the work. A homeowner, developer or owner-builder does not need to buy scheme cover merely because of that status, but a contractor who enters the relevant building contract may be the principal contractor and will generally carry the insurance obligation.

Do employees and subcontractors need their own HBC cover?

Generally, no. Employees and subcontractors are exempt from insurance under section 98 of the Home Building Act 1989. Service NSW also specifically says HBC cover is not needed when the work is subcontracted from another licensed contractor.

That exemption does not remove the principal contractor’s obligation:

• The principal contractor cannot satisfy its insurance obligation by asking employees, subcontractors or other workers to take out insurance.
• Insurance held by an employee or subcontractor does not cover the principal contractor.
• Where a licensed builder engages electricians and other trades as subcontractors, the builder remains responsible for insuring the whole project. The subcontractors do not need scheme cover for their work, regardless of their contract values.

What must be in place before the first payment?

The timing and contracting name are both important:

1. Hold enough cover. Each qualifying job must have HBC cover of at least $340,000.
2. Use the contracting name. The insurance must be taken out in the same name used to contract the work. If the contract is in a corporation’s name, the insurance must also be in that corporation’s name.
3. Arrange it early. Cover must be in place before requesting or accepting any money, including a deposit, or doing residential building work under the contract.
4. Provide the certificate. The certificate of insurance must be given to the homeowner before a deposit is taken or work starts.

Insurance can be bought from an insurer or provider licensed by SIRA, which publishes a list of approved licence holders.

How can the contractor check or arrange cover?

Service NSW provides the following process:

• Use HBC Assist to check whether the job needs HBC cover.
• Hold a contractor licence for building, trade or specialist work, an ABN or ACN, and a certificate of eligibility.
• Find an insurance broker distributor from icare HBCF’s list.
• Obtain the certificate of eligibility through that distributor.
• Submit the HBC cover application through the distributor.

Anyone can use the free public HBC check register to confirm whether a builder or tradesperson has valid cover for the residential work being carried out in NSW.

What can happen if the principal contractor is uninsured?

SIRA identifies both financial and project-related consequences:

Failure to insure may also affect the contractor’s ability to enforce the contract or recover money from the customer. It may affect planning-law requirements and the project’s commencement or certification. Uninsured work may also leave a current or future homeowner unable to claim under the scheme in relevant circumstances.

This is general information, not financial or legal advice. Check the SIRA regulator page and the relevant policy’s PDS before making a decision.

Sources

• Insurance obligations for residential building works - SIRA
• Apply for home building compensation cover | Service NSW

FAQ

Is $340,000 HBC cover required for every NSW electrical job over $20,000?

It is required when the electrician is the principal contractor for non-exempt residential building work. A subcontractor working for another licensed contractor generally does not need separate HBC cover for that work.

How are split contracts counted?

SIRA says the amount tested is the total of all contracts where the project is divided between multiple contracts. If the price is unknown or there is no contract, the test is whether the reasonable market cost of labour and materials will exceed $20,000 including GST.

Can an employee’s or subcontractor’s policy satisfy the principal contractor’s obligation?

No. Employees and subcontractors are generally exempt under section 98 of the Home Building Act 1989, but their insurance does not cover the principal contractor. The principal contractor must satisfy its own obligation.

When must HBC cover be in place, and whose name must it use?

Cover must be in place before requesting or accepting money, including a deposit, or starting work under the contract. It must be taken out in the same name used to contract the work, including the corporation’s name where applicable.