What is Construction Legal Expenses Insurance?

Construction Legal Expenses Insurance provides businesses with cover for legal expenses when they launch legal action against a customer or supplier, or have a legal action brought against them. Contractual disputes with customers or suppliers can cost a significant amount of money and take a long period of time to resolve. Construction Legal Expenses Insurance can provide cover for costs associated with obtaining legal advice and other expenses associated with resolving a contractual dispute.

Key Highlights

Being in a dispute can be stressful, especially when you’re faced with the expense of hiring a lawyer. Construction Legal Expenses Insurance helps you access legal advice and provides cover for legal costs and attendance expenses when you find yourself in an industry-specific contractual dispute with a client – or a supplier.   

  • The policy covers disputes relating to amounts greater than $5000 and up to $100,000. 
  • Cover is restricted to SME builders with a turnover no greater than $30 million.  
  • Includes cover for defence costs for a number of number of prosecution scenarios relating to licencing, OH&S and tenancy disputes.

Why might I need Construction Legal Expenses Insurance?  

If a homeowner believes there is a fault with the work carried out on their home building project, they may decide to pursue legal action to reduce the amount they owe their builder. The homeowner may count on a builder not wanting the hassle or the expense of pursuing a defence of the claim.

Construction Legal Expenses Insurance tilts the power balance away from the homeowner by allowing builders access to legal support as part of their claim or their defence without bearing the full cost.

The policy mitigates against the barrier of expensive legal fees and allows a builder to pursue the homeowners for the amount they owe. The homeowner will need to pay for their lawyers if they are unsuccessful in their action. And if the homeowner is successful in their action, Construction Legal Expenses Insurance will help cover the builder for their legal costs and costs awarded against them.

Construction Legal Expenses Insurance can also assist with issues relating to Occupational Health & Safety (OH&S) and discrimination protection. The policy provides cover for costs associated with specialist representation at inquiries by statutory authorities, licensing disputes, tenancy disputes and other inquiries, thus saving builders the expense of finding and engaging specialist lawyers.

What is your business covered for?

Subject to the full terms, conditions and limits of the Construction Legal Expenses Insurance policy, you’re covered for the following:

Prosecution Defence.

Cover for your costs and expenses of legal action including:

  • Data Protection. Your and opponent’s costs and expenses in respect of a claim for breach of the Privacy Act 1988 (Cth).
  • Employee Protection. Your and your employee’s expenses incurred from attending a criminal prosecution against the employee, including under the Competition and Consumer Act, due to the employee’s work duties while employed by you.
  • Property Protection. Your costs, attendance expenses and your opponent’s costs due to legal action you’ve pursued due to an act or lapse regarding the business premises and/or goods you own resulting in uninsured financial loss due to damage to that property.
  • Tenancy Disputes. Your costs, attendance expenses and your opponent’s costs of a legal action by or against your landlord in respect of a claim of breach of the terms contained within the lease or tenancy agreement applying to your business premises.
  • Statutory Licence Protection. Your costs, attendance expenses and opponent’s costs of a legal action arising from an appeal against suspension, revocation, alteration to the terms or refusal to renew a statutory licence.
  • Discrimination Protection. Your costs, attendance expenses and your opponent’s costs of a legal action brought against the insured in respect of a claim of infringement of human rights under discrimination legislation, which must not amount to deliberate discrimination.
Other Inquiry Protection

Your costs and attendance expenses in relation to an inquiry not covered under the more specific policy sections. Tax Disputes and Investigations – Your costs and attendance expenses of a legal action arising from:

  • Before proceedings - Legal fees and expenses incurred in relation to legal disputes, regulatory inquiries, etc.
  • During/after proceedings - Legal fees, expenses and attentdance costs incurred in either pursuing or defending your business in ongoing litigation
  • Competition and Consumer Act claims
  • An appeal against improvement/prohibition notice served under the Occupational Health & Safety Act 1991 or corresponding legislation of a state or territory of the Commonwealth.
  • A GST dispute with the ATO where the ATO is claiming additional GST and there are reasonable grounds for the dispute
  • A fringe benefits dispute in respect of a claim by the ATO for additional amounts of tax in accordance with the income tax legislation, where there are reasonable grounds for the dispute.

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Case Study

How one customer put this builder out of business

Builder Joe Massouri Pty Ltd was excited to undertake construction of a new home for his customer Mr Davidson. But before the project could be completed, a legal claim by Mr Davidson resulted in an avalanche of expenses that eventually forced Joe out of business.

Find out what happened

Why HIA Insurance Services?

HIA Insurance Services (HIAIS) is a joint venture between the Housing Industry Association (HIA) and Aon. The partnership means HIAIS can combine the construction industry expertise of the HIA with the risk and insurance knowledge of Aon to provide products and advice that are specific to the residential construction industry.

We understand the unique risk exposures of Australian builders, tradies and subcontractors, which means we can offer you policies that are tailored for risks commonly found in the construction sector, as well as fast and efficient claims processes.


Frequently Asked Questions

It’s important to note that Construction Legal Expenses Insurance policies are on a claims made and notified basis. Subject to the full terms, conditions and limits of the policy, you are covered for claims made against you during the present insurance policy period regardless of when an incident occurred. It means you are required to report or notify your insurer of any claim or known circumstance that may lead to a claim within the present policy period. 


No, in the event of a determination in favour of the homeowner, the amount disputed is not covered under the policy.  

Contractual disputes must first occur at least 90 days after the start of the first period of insurance before any claim can be considered relating to that dispute – and the amount in dispute must exceed $5000. 

Construction Legal Expenses Insurance for the Building and Construction Industry is arranged by HIAIS via a wholesale market, One Underwriting Pty Ltd ABN 50 006 767 540 AFSL no. 236 653 (One Underwriting). One Underwriting is a Lloyd’s Coverholder and acts on behalf of Certain Underwriters at Lloyds through the Channel Syndicate. If you purchase this insurance through HIAIS, both One Underwriting and HIAIS will receive a commission that is a percentage of the premium. Further information can be found in HIAIS’ FSG or provided upon request.