What happens if my NSW builder goes broke halfway through?
Researched by the LokalMatch editorial team1 answer
The frame is up, the builder has stopped answering, and I have heard the company is in trouble.
Answers (1)
LokalMatch EditorialLokalMatch editorial
On a job over 20,000 dollars there should be an insurance policy standing behind it. Licensed builders and tradespeople in New South Wales must hold Home Building Compensation cover for every residential project above that figure, including GST.
The cover is described as a last resort, and the phrase is accurate: it responds where the business cannot complete the work or fix defects, not where you and a solvent builder simply disagree.
The timing of the check is everything. Cover has to be obtained before the work starts and before any money is taken under the contract, deposit included. So the moment to confirm it existed was before your first payment, and the moment to confirm it now is today, using the government's own HBC Check tool rather than a certificate the builder emailed you.
If you are reading this before signing rather than after: run that check, keep the screenshot, and do not let a deposit leave your account until the policy for your job is visible on it.
Answers come from pros and are reviewed by LokalMatch before they’re published. They’re general information — for regulated or safety-critical work, have a licensed professional assess your situation.
Sources
Where the facts on this page come from.
Insurance cover for building work — NSW Government (accessed 24 September 2026)
Consumer Building Guide — NSW Government (accessed 24 September 2026)