1.1 The South Australian Government Financial Authority published ‘The Home Building Protection

1300 Words6 Pages
The South Australian Government Financial Authority published ‘The Home Building Protection review’, in January 2014. The paper is a summary of the state’s present provisions and any changes which are to be considered by the South Australian government. The building aspects are explained and detailed to educate readers. These include insurance, licensing and supervision, amendments, law and contract requirements, as well as the difference between Government and private sectors. They will be elaborated in the following paragraphs. The given information has been studied, compared and analysed with past, present and future insurance structures, as well as their adequate use. Therefore this paper allows readers who are involved and
…show more content…
One of the most significant finical investments by a consumer is building or a renovation on a project. In 2010, the building industry had a considerable downfall. Thus many investors withdrew from the industry and this created difficult conditions in the economy. There was an upsurge of builders who went into liquidation and consumer claims. Therefore it was unprofitable and a loss for investors.
When a builder of a project becomes bankrupt, i.e. insolvent, they are inadequate to complete the work and thus the consumer will occur in meaningful loss. Therefore the head contractor cannot pay for the work of their sub-contractors, as there will likely be more than one. Forcing the consumer to pay for any unpaid work completed by sub-contractors. The consumer will also need to pay for any goods purchased through supplies. It becomes a higher costing investment for the homeowner. The consumer will need to obtain another head contractor who will need to complete and may need to hire different sub-contractors as well. This then becomes a time consuming process.

The main problem occurring through in the building industry, that the review is trying to address is building indemnity insurance. The paper explains reasons to why the private insurers are abandoning to provide indemnity insurance to contractors. In the year 2013, the final two insurers in South Australia terminated the distribution of building indemnity insurance. The private insurers persist to
Get Access