New South Wales Consolidated Acts

HOME BUILDING ACT 1989 - SECT 101

101 Deemed insolvency of contractor for insurance purposes

(1) A contract of insurance in relation to residential building work required by section 92 or 96 must include provision that deems the suspension of a contractor's licence under section 42A to constitute the insolvency of the contractor for the purposes of the application of the contract to any loss that is the subject of a building claim order made against the contractor that remains unsatisfied.

(2) The following provisions apply to a claim under a contract of insurance that arises because of the operation of this section in connection with a building claim order--

(a) the claim is limited to a loss that would have been covered by the contract in the event of the contractor's insolvency,

(b) the amount of the claim need not be the same as the amount of the building claim order (and in particular is not limited by the amount of the building claim order),

(c) the building claim order does not limit any right of a beneficiary to appeal against a decision of the insurer in respect of a claim under the contract (and any such right of appeal may be exercised as if the building claim order had not been made),

(d) the building claim order does not limit any right of recovery of the insurer against the contractor in respect of the loss to which the claim relates (whether that right arises pursuant to any rights of the beneficiary to which the insurer is subrogated, or otherwise).

(3) For the purposes of the operation of a provision of a contract of insurance referred to in subsection (2), a contractor's licence that would have been suspended under section 42A were it not for the fact that the licence expired, or was surrendered or cancelled, before the suspension took effect is taken to have been suspended under that section.

(4) In this section--

"building claim" has the same meaning as in Part 3A, and includes a claim for the payment of an unspecified sum of money that arises from a supply of building goods or services as defined in section 48A.

"building claim order" means an order of a court or the Tribunal in respect of a building claim.