terms and conditions of insurance 2

8/3/2019 Terms and Conditions of Insurance 2

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Insurance Policy

ConditionsEDITION 8

EFFECTIVE 1 JULY 2009

Helping Queenslanders Build Betteralterations

additions

newc

on

structions

kitchens

bathroom

s

garagesp

atios

pergolas

sheds

carpo

rts

decks


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Dear Homeowner,

These documents are your Home Warranty InsurancePolicyand Insurance Certifcate.

The BSAHome Warranty Insuranceis provided by theBSA because you have chosen a BSA licensed builder

to construct your home. This booklet explains the termsand conditions o the Home Warranty InsurancetheBSA provides or your property and the certifcateshows details o the policy, your builder, the value othe contractand your policys expiry date.

PLEASE DO NOT THROW THESEDOCUMENTS AWAY.

You should read this booklet careully and then storeit in a sae place. You may need to reer to it i youencounter diculties with your construction and wishto make a claim.

I you have any questions regarding the contents othis booklet or the details on your certifcatepleasephone 1300 272 272 or visit your nearest BSA oce.


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TABLE OF CONTENTS

- Insurance Policy Conditions 41 Non-Completion 5

2Non-Completion: Acts oVandalism and Forcible

Removal

9

3Non-Completion: Fire, Stormor Tempest

12

4 Deective Construction 15

5 Subsidence or Settlement 186 Limits o Liability 21

7 General Exclusions 32

8 Claims 39

9 Payments 40

10 Reviewable Decisions 40

11 Denitions and Interpretations 41


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PART 1: NON-COMPLETION

1.1 Payment or Non-Completion

Subject to the terms o this policy, the BSA agreesto pay or loss suered by the Insuredin the evento the contractorailing to complete the contractor

the residential construction work.

1.2 Termination o Contract

The BSA is only liable to pay or loss under thisPart when the contractis or a fxed priceand theInsuredhas properly terminatedthe contractwith

the contractor.

1.3 Works Commenced

For the purposes o this Part contracted works arecommenced when:

(a) construction o the permanent ootingsystem o a building comprising residentialconstruction workis commenced; or

(b) in the case o a contractor residentialconstruction workwhere no ooting systemis to be constructed - when change to the

existing structure is physically commenced.To remove doubt, work has not commenced i onlypreparatory workhas been perormed.

1.4 Amount o Payment Where Work has NotCommenced

Subject to Parts 6, 7 and 8 o this policy, wherethe contractorhas not commenced the contractedworks in accordance with clause 1.3, the amounto the payment is limited to the total o:

(a) the lower o:

(i) the amount o any unreunded depositpaid by or on behal o the Insuredtoor on behal o the contractor; or

(ii) i the contractprice is equal to or morethan $20,000 5% o the contract


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price (however this amount is limitedto the BSAs maximum liability o$200,000 specied in Part 6 o thispolicy); or

(iii) i the contractprice is less than$20,000 10% o the contractprice;and

(b) interest on the amount payable under

paragraph (a) at the rate stated in thecertifcateor the period rom when the depositwas paid until the date when the contractwasproperly terminatedby the Insured.

1.5 Amount o Payment Where Works haveCommenced

Subject to the provisions o Parts 6, 7 and 8 o thispolicy, where the contractorhas commenced thecontracted works in accordance with clause 1.3,the amount o the payment under this Part is limitedto the total o:

(a) the BSAs assessment o the reasonablecost o completing the contractless theInsureds remaining liability under thecontract(exclusive o any amount by way oliquidated damages or damages or delay)at the date o termination o the contract;

and

(b) in the case o a contractor residentialconstruction workother than a contractinvolving building work to a related rooedbuilding, an amount the BSA determines is

reasonable or alternative accommodationo the Insured, removal and storage costs,necessarily incurred by the Insuredas aresult o the non-completion and becausethe residential construction workis, in theopinion o the BSA, uninhabitable.

Any such payment will be limited to thosereasonable alternative accommodation, removaland storage costs necessarily incurred as a resulto the contractors ailure to complete the contractor the period rom:


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the date nominated or stated in thecontractor practical completion; or

the date when the Insuredhas properlyterminatedthe contractwith thecontractor; or

the date the Insuredgives notication othe claim to the BSA;

whichever date is the latest, until the date that

the residential construction workreerred to inparagraph (b) is substantially complete in theopinion o the BSA.

For the period between receipt o the ormal claimapproval rom the BSA, and the making o acontractor recommencement o construction, thepayment is limited to those expenses incurred overa maximum period o 7 days.

1.6 Limit on Right to Payment

(a) Where, in the opinion o the BSA, the value

o the contracted works to be undertakenclearly exceeds the price to be paid, theBSA will reduce the amount payable underthis policy by the amount o that excess asdetermined by the BSA.

(b) Where in the opinion o the BSA, the Insured

pays to or on behal o the contractoranymoneys or the contracted works beore theybecome due (prepayment), the BSA willreduce the amount payable under this policyby the value o that prepayment. (The valueo the prepayment is the BSAs assessment o

the value o the incomplete work in the stageo the contractor which the prepayment wasmade).

1.7 Expiry o Cover

The BSA is only liable to pay or loss under this

Part where the Insuredhas properly terminatedthecontractwith the contractorwithin 2 years rom thedate o payment o the insurance premium or thedate o entering into the contract(whichever is theearlier).


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1.8 Time Limit or Making a Claim

The Insuredis NOT ENTITLED to payment or loss

under this Part unless the claim is made underthis Part within 3 months o the Insuredproperlyterminating the contract, or within such urther timeas the BSA may allow.

1.9 No Liability in Certain Circumstances

The BSA is not liable under this Part:(a) in relation to a contractor contracts or:

(i) residential construction workinvolvingmore than two living units between theInsuredand the one contractor; or

(ii) residential construction workto thecommon propertyo a multiple storeydwelling other than a duplexbetweenthe Insuredand the one contractor,unless at least 50% o the units wereoccupied when the contractwas

entered into, and when the contractwas terminated; or

(iii) residential construction workinvolvingthe construction o a multiple storeydwelling other than a duplex.

(b) where the Insuredhas exercised the Insuredsright to withdraw rom the contractduringthe cooling o period in accordance withthe terms o the contract, or pursuant to theprovisions o the Domestic Building ContractsAct 2000.

For sub-section 1.9(a)(i):(a) a single detached dwelling is taken to be 1

living unit; and

(b) a residential unitis taken to be 1 living unit;and

(c) a duplexis taken to be 2 living units.


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PART 2: NON-COMPLETION -ACTS OF VANDALISM

AND FORCIBLE REMOVAL

2.1 Payment or Vandalismand Forcible Removal

Subject to the terms o this policy, the BSA agreesto pay or loss suered by the Insuredin theevent o another person causing damage to ordestruction o standing workthrough vandalism ororcible removal.

2.2 Commencement o Cover

Subject to clause 2.10, the BSAs liability underthis Part commences when the BSA receives theInsureds claim under Part 1 o this policy and onlywhere:

(a) the claim is or loss suered by the Insuredbecause the contractorailed to complete

residential construction workunder acontract; and

(b) standing workormed part o the contractedworks under the contract.

To remove doubt the BSA is not liable and the

Insuredis not entitled to payment under this policyor loss resulting rom a defned eventoccurringprior to the lodgement o a claim under Part 1 othis policy.

2.3 Lodgement o Claim

The BSA is only liable to pay or loss under thisPart i the Insuredlodges a claim under this Partwithin 14 days o the defned eventwhich causedthe loss.

2.4 Reporting o Defned Eventto Police

The Insuredmust make a ormal complaint to thepolice about the defned eventprior to lodginga claim under this Part, and must provide theinormation required in accordance with clause2.11 to the BSA at the time the claim is lodged.


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2.5 Excess

An excess o $2,500 is payable by the Insuredor

each defned eventor which loss is claimed underthis Part.

2.6 Amount o Payment

Subject to Parts 6, 7 and 8 o this policy, i a claimis made under this Part payment is limited to the

reasonable cost, as determined by the BSA, oundertaking those works necessary to reinstatethe standing workto the same state that it wasimmediately prior to the defned eventless theInsureds remaining liability under the contractaterassessment o the Insureds claim under Part 1 o

this policy.

2.7 Rectifcation Without Approval

The Insuredis not entitled to payment or loss underthis Part i the damaged or destroyed standingworkis rectied or otherwise reinstated without the

prior written approvalo the BSA.

2.8 Expiry o Cover under this Part

The BSA ceases to be liable under this Part on theearliest o the ollowing:

(a) 6 months rom the date the contractorresidential constructionworkwas properlyterminated;

(b) the date the Insuredenters into a contractto complete the work that was contractedto be perormed under the terminated

contractunder which the standing workwasperormed;

(c) 7 days ater the BSAs written approval oa claim under Part 1 or which the standingworkormed part o the contracted works.

2.9 Expiry o Cover or Loss Caused by aParticular Deined Event

Without limiting clause 2.8, the BSA ceases to beliable under this Part or a particular defned eventon the earliest o the ollowing:


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(a) the date the Insuredenters into a contracttorectiy or reinstate damage or destruction tothe standing workcaused by the particulardefned event;

(b) 7 days ater the BSAs written approval o aclaim under this Part or loss caused by theparticular defned event.

2.10 Exclusion rom Cover Where the BSAisNot Liable under Part 1

The BSA is not liable under this Part i the BSA isnot liable under Part 1 o this policy, or the Insuredis not entitled to payment under Part 1 o thispolicy, or non-completion o a contractor which

the standing workormed part o the contractedworks.

This clause does not apply in circumstances wherethe Insuredwould be entitled to a payment underPart 1 but or the operation o either clause 1.5(a)or clause 6.6 o this policy.

2.11 Inormation to be Provided to the BSA

The Insuredis not entitled to payment under thisPart i the Insuredails to provide the BSA with theollowing inormation:

(a) evidence o the Insureds complaint to thepolice about the defned event; and

(b) all other inormation reasonably requiredby the BSA as being necessary to assess theclaim.

2.12 Access to Assess a ClaimThe Insuredis not entitled to payment under thisPart i the Insuredreuses the BSA or a delegateo the BSA access to the standing workor thepurposes o assessing the damage or destructioncaused by the defned event.


The BSA is not liable under this Part or any o theollowing:


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(a) loss in relation to public or legal liability orthe payment o compensation in respect odeath, bodily injury or illness, occurring on thepremises during the period o insurance, orloss suered as a result o deective products;

(b) loss to other property, including butnot limited to adjoining properties andassociated building workas a result o the

defned event;(c) loss in relation to the cost o removing tree

stumps or any part o a tree that has notallen or caused damage to standing work.

PART 3: NON-COMPLETION -FIRE, STORM OR TEMPEST

3.1 Payment or Fire, Stormor Tempest

Subject to the terms o this policy, the BSA agreesto pay or loss to the Insuredin the event odamage to, or destruction o standing workcausedby a fre, storm or tempest.

3.2 Commencement o Cover

Subject to clause 3.8, the BSAs liability underthis Part commences when the BSA receives theInsureds claim under Part 1 o this policy and onlywhere:

(a) the claim is or loss suered by the Insuredbecause the contractorailed to completeresidential construction workunder a

contract; and(b) standing workormed part o the contracted

works under the contract.

To remove doubt the BSA is not liable and theInsuredis not entitled to payment under this policy

or loss resulting rom a defned eventoccurringprior to the lodgement o a claim under Part 1 othis policy.

3.3 Lodgement o Claim

The BSA is only liable to pay or loss under this Part


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i the Insuredlodges a claim under this Part within14 days o the defned eventwhich caused the loss.

3.4 Amount o PaymentSubject to Parts 6, 7 and 8 o this policy, i a claimis made under this Part, payment is limited to thereasonable cost, as determined by the BSA, oundertaking those works necessary to reinstatethe standing workto the same state that it wasimmediately prior to the defned eventless theInsureds remaining liability under the contractaterassessment o the Insureds claim under Part 1 othis policy.

3.5 Rectiication Without Approval

The Insuredis not entitled to payment or lossunder this Part i the damaged or destroyedstanding workis reinstated without the prior writtenapprovalo the BSA.

3.6 Expiry o Cover under this Part

The BSA ceases to be liable under this Part on theearliest o the ollowing:

(a) 6 months rom the date the contractorresidential construction workwas properlyterminated;

(b) the date the Insuredenters into a contractto complete the work that was contractedto be perormed under the terminatedcontractunder which the standing workwasperormed;

(c) 7 days ater the BSAs written approval oa claim under Part 1 or which the standingworkormed part o the contracted works.

3.7 Expiry o Cover or Loss Caused by aParticular Deined Event

Without limiting clause 3.6, the BSA ceases to beliable under this Part or a particular defned eventon the earliest o the ollowing:

(a) the date the Insuredenters into a contracttorectiy damage or destruction to the standing


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workcaused by the particular defned event;

(b) 7 days ater the BSAs written approval o a

claim under this Part or loss caused by theparticular defned event.

3.8 Exclusion rom Cover Where the BSAisNot Liable under Part 1

The BSA is not liable under this Part i the BSA

is not liable under Part 1 o this policy, or theInsuredis not entitled to receive a payment or lossunder Part 1 o this policy, or non-completion o acontractor which the standing workormed parto the contracted works.

This clause does not apply in circumstances wherethe Insuredwould be entitled to a payment underPart 1 but or the operation o clause 1.5(a) orclause 6.6 o this policy.

3.9 Firecaused byVandalismor ForcibleRemoval

To remove doubt, the BSA is not liable underthis Part or loss to standing workthat has beendamaged or destroyed by frecaused by orarising out o vandalism, orcible removalor otherunlawul act.

3.10 Inormation to be Provided to the BSA

The Insuredis not entitled to payment under thisPart i the Insuredails to provide the BSA with allinormation reasonably required by the BSA asbeing necessary to assess the claim.

3.11 Access to Assess a Claim

The Insuredis not entitled to payment under thisPart i the Insuredunreasonably reuses the BSAor a delegate o the BSA access to the standingworkor the purposes o assessing the damage or

destruction caused by the defned event.3.12 No Liability in Certain Circumstances

The BSA is not liable under this Part or any o theollowing:


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(a) loss caused gradually out o repeatedexposure to freor smoke;

(b) loss in relation to public or legal liability orthe payment o compensation in respect odeath, bodily injury or illness, occurring onthe premises during the period o insurance,or loss suered as a result o deectiveproducts;

(c) loss to other property, including butnot limited to adjoining properties andassociated building workas a result o fre,storm or tempestcommencing or occurringon, or otherwise aecting, the residentialconstruction worksubject to this policy;

(d) loss in relation to the cost o removing treestumps or any part o a tree that has notallen or caused damage to standing work.

PART 4: DEFECTIVE CONSTRUCTION

4.1 Payment or Deective Construction

Subject to the terms o this policy, the BSA agreesto pay the cost o rectiying deects in the residential

construction workthat is primary building work,other than or deects rom subsidence or settlementreerred to in Part 5 o this policy.


(a) Subject to clause 4.2(c) and Parts 6, 7

and 8 o this policy, the amount o thepayment under this Part will be limited tothe reasonable cost, as determined by theBSA, o undertaking those works necessaryto rectiy the deects, less, where the Insuredcontracted with the contractoror the

undertaking o the residential constructionworkwhich is deective, the ownersremaining liability under the contract.

Under this clause 4.2(a), or the purpose odetermining the owners remaining liability


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under the contract, the BSA may creditthe ownerwith an amount or which thecontractorhas, or valuable consideration,waived payment and an amount or whichthe contractoris liable to the ownerin respecto the contractor the contracted works.

(b) Where the BSA has admitted a claim orpayment or loss relating to deects, it may

i it thinks t, having given prior writtenapproval, pay the Insuredor the reasonablealternative accommodation o the Insuredand any removal and storage costs o theInsuredas determined by the BSA as havingbeen necessarily incurred by the Insuredasa result o the need to rectiy the deects andbecause the residential construction workis,in the opinion o the BSA, uninhabitable.

(c) Where, in the opinion o the BSA,the undertaking o remedial works isunnecessary or unreasonable, the payment

under this clause 4.2 will be limited tothe loss in value, i any, as determinedby the BSA in the residential constructionwork, produced by the departure rom theplans or specications or by the deectiveworkmanship or materials.

4.3 Limits on Right to Payment

The BSAs liability to pay under this Part will notarise:

(a) where, in the opinion o the BSA, the Insuredunreasonably reuses access to the contractor

or his/her agent to undertake rectication; or(b) in circumstances where the BSA issues a

direction to rectiy deective work, untilthe BSA is satised that the contractorwill not comply with that direction or therequirements o the Tribunalor a Court inrelation to that direction; or

(c) in circumstances where the contractorhasa continuing obligation to complete theresidential construction work.


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4.4 Expiry o Cover

(a) Subject to clause 4.4(c), the BSA is only

liable to pay or loss under this Part or acategory 1 deectwhere the deect rstbecame evident within 6 years and 6 monthsater:

(i) the date o payment o the insurancepremium, or the date o entering into

the contract(and where more than onedate, whichever is the earlier); or

(ii) where no insurance premium was paidand there was no written contract, thedate o commencement o construction.

(b) The BSA is only liable to pay or loss underthis Part or a category 2 deectwhere thedeect rst became evident within 6 monthsater the date o practical completion o theresidential construction work.

(c) Where the residential construction work,

(and residential construction workcomprisingmore than one separate residence will beconsidered separately), has not reachedpractical completion within 6 months ater:



(ii) where no insurance premium was paidand there was no written contract, thedate o commencement o construction,

the period o insurance cover under thispolicy in respect o category 1 deects willbe extended by the amount o time by whichthe time taken to reach practical completiono the residential construction work(andresidential construction workcomprisingmore than one separate residence will beconsidered separately) exceeds the period o6 months rom that date.


The Insuredis NOT ENTITLED to payment or loss


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under this Part unless:

(a) in the case o a category 1 deect, the claim

is made within 3 months o that deect rstbecoming evident (in the opinion o theBSA); or

(b) in the case o a category 2 deect, the claimis made within 7 months o the date opractical completion,

or within such urther time as the BSA may allow.


The BSA is not liable under this Part or that parto residential construction workthat is associated

building work.

PART 5: SUBSIDENCE OR SETTLEMENT

5.1 Payment or Subsidence or Settlement(a) Subject to the terms o this policy, the BSA

agrees to pay or the cost o remedyingsubsidence or settlement damage to theresidential construction workthat is primarybuilding work.

(b) For the purposes o this policy, subsidenceor settlement means movement in theoundations o the residential constructionworkwhich adversely aects the structuraladequacy or serviceability, perormance orunctional use o that work.


Subject to Parts 6, 7 and 8 o this policy, theamount o the payment under this Part will be:

(a) (i) where the residential construction

workhas been completed and theInsuredcontracted with the contractoror the undertaking o the residentialconstruction workwhose oundationshave subsided or settled, the reasonablecost o remedying the residential


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construction workless the ownersremaining liability under the contract; or

(ii) where the residential constructionworkhas been completed and theInsuredpurchased the landon whichthe residential construction workhasbeen perormed, the reasonable cost oremedying the residential constructionwork; or

(iii) where the residential constructionworkhas not been completed, thereasonable cost o remedying theresidential construction work; and

(b) where the BSA has admitted a claim or

payment or loss in relation to subsidence orsettlement, it may i it thinks t, having givenprior written approval, pay the Insuredorthe reasonable alternative accommodationo the Insuredand any removal and storagecosts o the Insurednecessarily incurred by

the Insuredas a result o the need to remedythe subsidence and settlement damage andbecause the residential construction workis,in the opinion o the BSA, uninhabitable.

5.3 Limits on Right to Payment

The BSAs liability or payment under this Part willnot arise:

(a) where, in the opinion o the BSA, the Insuredunreasonably reuses access to the contractoror his/her agent to undertake rectication; or

(b) in circumstances where the BSA issues adirection to rectiy deective work, until the BSAis satised that the contractor will not complywith that direction or the requirements o theTribunalor a Court in relation to that direction.

5.4 Expiry o Cover

(a) Subject to clause 5.4(b), the BSA is onlyliable to pay or loss under this Part wherethe subsidence or settlement rst becameevident within 6 years and 6 months ater:


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(i) the date o payment o the insurancepremium, or the date o entering intothe contract(and where more than onedate, whichever is the earlier); or

(ii) where no insurance premium was paidand there was no contract, the date ocommencement o construction.

(b) Where the residential construction work,

(and residential construction workcomprisingmore than one separate residence will beconsidered separately), has not reachedpractical completion within 6 months ater:



(ii) where no insurance premium was paidand there was no written contract, thedate o commencement o construction,

the period o insurance cover under this policyin respect o subsidence or settlement will beextended by the amount o time by which thetime taken to reach practical completion o theresidential construction work(and residentialconstruction workcomprising more than oneseparate residence will be considered separately)

exceeds the period o 6 months rom that date.


The Insuredis NOT ENTITLED to payment or lossunder this Part unless the claim is made within3 months o the subsidence or settlement rstbecoming evident (in the opinion o the BSA), orwithin such urther time as the BSA may allow.


The BSA is not liable under this Part or the costo remedying subsidence or settlement damageor residential construction workthat is associatedbuilding work.


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PART 6: LIMITS OF LIABILITY

6.1 Limits o Liability

In no case will the BSA be liable to an Insuredoran amount in excess o the maximum amount opayment or loss calculated in accordance with this

policy.

6.2 Maximum Liability - Single DetachedDwelling, Duplexor Related RooedBuilding(that is not part o a contractorother Residential Construction Work) -

Prior to Practical Completion(a) This clause applies to liability under this

policy in relation to:

(i) a single detached dwelling; or

(ii) a duplex; or

(iii) a related rooed building that is noterected or constructed, rectied orotherwise altered as part o a contractor the perormance o other residentialconstruction work.

(b) The maximum amount o payment or which

the BSA will be liable or all claims in theaggregate under this policy, in respect oa building mentioned in paragraph (a),that includes any or all o the ollowingcomponents:

(i) loss resulting rom non-completion oworks;

(ii) loss to standing workresulting romvandalism and orcible removal;

(iii) deects that become apparent prior topractical completion o works;

(iv) subsidence or settlement that becomesapparent prior to practical completiono works;

will be the replacement valueo the residentialconstruction workor $200,000, whichever is


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less. That amount includes, where applicable,a maximum o $5,000 or alternativeaccommodation, removal and storage costs.

6.3 Maximum Liability Single DetachedDwelling, Residential UnitorRelated RooedBuilding(that is not part o a contractorother Residential Construction Work) - AterPractical Completion

(a) This clause applies to liability under thispolicy in relation to:

(i) a single detached dwelling; or

(ii) a residential unit; or

(iii) a related rooed building that is noterected, constructed, rectied orotherwise altered as part o a contractor the perormance o other residentialconstruction work.

(b) The maximum amount o payment or whichthe BSA will be liable or all claims in theaggregate under this policy, in respect toa building mentioned in paragraph (a),that includes any or all o the ollowingcomponents:

(i) loss resulting rom deective work that

becomes apparent ater practicalcompletion;

(ii) subsidence or settlement that becomesapparent ater practical completion;

will be the replacement valueo the residentialconstruction workor $200,000, whichever is

less. That amount includes, where applicable,a maximum o $5,000 or alternativeaccommodation, removal and storage costs.

6.4 Maximum Liability Contracted Worksthat comprise o a Related Rooed Building

and other Residential Construction Work(a) This clause applies to liability under this policy

in relation to contracted works that includesthe erection or construction o, or constructionon, at least one related rooed building and


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other residential construction work.


the BSA will be liable or all claims in theaggregate under this policy, in respect ocontracted works mentioned in paragraph(a), that includes any or all o the ollowingcomponents:

(i) loss resulting rom non-completion o

works;(ii) loss to standing workresulting rom

vandalism and orcible removal;

(iii) loss resulting rom deective work thatbecomes apparent prior to practicalcompletion o works;

(iv) subsidence or settlement that becomesapparent prior to practical completiono works;

will be:

(v) or a single detached dwelling and the

related rooed building or buildings -the replacement valueo the contractedworks or $200,000, whichever is thelower amount;

(vi) or each residential unitand the relatedrooed building or buildings - the

replacement valueo the contractedworks or $200,000, whichever is thelower amount.

(c) The maximum amount o payment or whichthe BSA will be liable under this policy ora claim, in respect o contracted worksmentioned in paragraph (a), that includesany or all o the ollowing components:

(i) loss resulting rom deective work thatbecomes apparent ater practicalcompletion;

(ii) subsidence or settlement that becomesapparent ater practical completion;

will be:

(iii) or a single detached dwelling and therelated rooed building or buildings -


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the replacement valueo the contractedworks or $200,000, whichever is thelower amount;

(iv) or each residential unitand the relatedrooed building and buildings - thereplacement valueo the contractedworks or $200,000, whichever is thelower amount.

6.5 Maximum Liability Common Property(a) This clause applies to liability under the

Schemeor the common propertycomponento contracted works.


the BSA will be liable under the Schemeor all claims in the aggregate, in respecto the common propertyin paragraph (a),that includes any or all o the ollowingcomponents:

(i) loss resulting rom non-completion o

works;(ii) loss resulting rom deective work;

(iii) subsidence or settlement;

will be:

(iv) $1,000,000; or

(v) $200,000 times the number oresidential units in the building; or

(vi) an amount calculated by the BSA asthe replacement valueo the contractedworks;

whichever is the lowest amount.

(c) Unless otherwise required by the BodyCorporateand Community ManagementAct 1997, any payment approved underthe Schemeor common propertyis to beapportioned between the residential units in

the building according to their interest schedulelot entitlements o their respective lots and theirrespective policies under the Scheme.


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6.6 Maximum Liability Failure to CompleteWorks

(a) The maximum payment that can be madeor all claims in the aggregate to the Insuredunder Part 1 where the Insuredhas enteredinto one contractwith a contractororresidential construction workis the lower o:

(i) the BSAs assessment o the amount o

payment under Part 1 o this policy; or(ii) $200,000; or

(iii) the balance remaining rom $200,000ater the deduction o all amountsapproved under Part 2 o this policy.

(b) However, i the Insuredhas entered intomore than one contractwith the samecontractoror residential construction work,the maximum payment that can be madeor all claims in the aggregate to the Insuredunder Part 1 o this policy, is the lower o:

(i) the BSAs assessment o the amount opayment under Part 1 o this policy; or

(ii) $200,000; or

(iii) the balance remaining rom $200,000ater the deduction o the ollowing:

A. all amounts approved under Part 2o this policy; and

B. all amounts approved under theSchemeor the other contractor contracts in relation to lossassociated with the contractor

ailing to complete the otherrespective contractor contracts orresidential construction work; and

C. all amounts approved under theSchemeor the other contractorcontracts in relation to one or

more claims or loss associatedwith damage to or destruction ostanding workthrough vandalism ororcible removal.


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6.7 Maximum Liability VandalismandForcible Removal

The maximum payment that can be made to theInsuredor all claims in the aggregate under Part2 o this policy where the Insuredhas enteredinto one contractwith a contractoror residentialconstruction workis the lower o:

(a) the reasonable cost, as determined by the

BSA, o undertaking those works necessaryto reinstate the standing workto a conditionsubstantially the same as, but not better ormore extensive than immediately prior to thedefned event; or

(b) $200,000; or(c) the balance remaining rom $200,000 ater

the deduction o the ollowing:

(i) all amounts approved under Part 1 othis policy; and

(ii) all amounts approved under Part 2o this policy or the same or anotherdefned event.

I the Insuredhas entered into more than onecontractwith the same contractoror residentialconstruction work, the maximum payment that can

be made to the Insuredunder Part 2 o this policy,is the lower o:

(a) the BSAs assessment o the amount opayment under Part 2 o this policy; or

(b) $200,000; or

(c) the balance remaining rom $200,000 aterthe deduction o the ollowing:

(i) all amounts approved under Part 1 othis policy; and

(ii) all amounts approved under Part 2o this policy or the same or another

defned event; and(iii) all amounts approved under Part 1 o

the Schemeor the other contractorcontracts in relation to one or moreclaims or loss associated with the


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contractorailing to complete the otherrespective contractor contracts orresidential construction work; and

(iv) all amounts approved under theSchemeor the other contractorcontracts in relation to one or moreclaims or loss associated with damageto or destruction o standing workthrough vandalism or orcible removal.

6.8 Maximum Liability - Fire, StormandTempest- Single Deined Event

(a) Subject to clause 6.9, the total maximumamount o payment or which the BSA will be

liable or all claims in the aggregate underPart 3 o this policy or a single defnedeventis the lower o:

(i) the BSAs assessment o the totalamount o payment under Part 3 o thispolicy; or

(ii) $200,000.(b) However, i the Insuredhas entered into

more than one contractwith the samecontractoror residential construction work,the total maximum payment that can bemade to the Insuredunder Part 3 o this

policy or all claims in the aggregate,notwithstanding that loss may arise as aresult o more than one defned event, is thelower o:

(i) the BSAs assessment o the totalamount o payment under Part 3 o this

policy; or(ii) $200,000; or

(iii) the balance remaining rom $200,000ater deduction o all amountsapproved under the Schemeor anyother contractor contracts with thesame contractorin relation to losscaused by fre, storm or tempest.

To remove doubt or clause 6.8(b)(iii), the reerenceto fre, storm or tempestin this clause is not limited to


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the same single defned eventreerred to in clause6.8(b).

6.9 Maximum Liability - Fire, StormandTempest- Multiple Deined Events

(a) The total maximum amount o payment orwhich the BSA will be liable or all claims inthe aggregate under Part 3 o this policy wherethere are multiple defned events during theperiod o cover under this policy is the lower o:

(i) the replacement value o the standingworkto reinstate it to the state it was,as ar as practicable, immediately priorto the rst relevant defned event; or

(ii) $200,000.(b) However, i the Insuredhas entered into

more than one contractwith the samecontractoror residential constructionworkor the claim is in relation to multipleresidential units under construction, the

maximum payment that can be made tothe Insuredunder Part 3 o this policy orall claims made in relation to the defnedevents, is the lower o:

(i) the replacement value o the standingworkto reinstate it to the state it was, as

ar as practicable, immediately prior tothe rst relevant defned event; or

(ii) $200,000; or

(iii) the balance remaining rom $200,000ater deduction o all amountsapproved under the Schemeor anyother contractor contracts with thesame contractorin relation to losscaused by fre, storm or tempest.

To remove doubt or clause 6.9(b)(iii), the reerenceto fre, storm or tempestin this clause is not limited

to the same single defned eventreerred to inclause 6.9(b).

6.10 Total Maximum Liability

(a) To remove any doubt, the maximum amount


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payable by the BSA or all claims in theaggregate under this policy in relation to asingle detached dwelling, residential unitorrelated rooed building, is $600,000.

(b) To remove any doubt, the BSA is not liableor a claim in relation to deective work orsubsidence or settlement which becomesapparent ater practical completion, i the same

deect was, or in the opinion o the BSA shouldhave been, apparent to the Insured, its agentor delegate prior to practical completion.

6.11 Taxes

(a) Any payment made by the BSA under this

policy is inclusive o all relevant taxes on theamounts paid or payable.

(b) All maximum liability amounts stated in thispolicy are inclusive o all relevant taxes inrespect o those amounts.

(c) Where the amount o any payment to bemade by the BSA under this policy is to beassessed or calculated by reerence to costsexpected to be incurred by the Insured, thosecosts are to be determined:

(i) ater reduction or the amount o any

input tax credits to which the Insuredis, or in the opinion o the BSA couldreasonably be expected to be, entitledto claim in respect o those costs; and

(ii) exclusive o any GSTliability orsupplies made, or which may be made,

by the Insured.In orming its opinion o whether the Insuredis,or could reasonably be expected to be entitled toclaim input tax credits in respect o any cost, theBSA may have regard to whether it is likely thatthe acquisition or which the cost was incurred, will

relate to a taxable supply, given: thestatusoftheInsuredas registered or

GSTpurposes;

thenatureoftheenterpriseordinarilycarried out by the Insured; and


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thebalanceofanyotherevidenceavailable to the BSA that the Insuredwould be likely to deal with the propertyin such a way that the acquisition wouldrelate to a taxable supply, rather than aninput taxed supply.

(d) Where the assessment or calculation othe amount o any payment to be made

by the BSA under this policy involves anadjustment or the remaining liability undera contractentered into ater 30 June 2000and where GSThas been included in thatcontractliability, then the adjustment orthat remaining liability may be determinedater reduction or the amount o any inputtax credits to which the Insuredcould, in theopinion o the BSA, reasonably have beenexpected to be entitled to claim in respect othat remaining liability.

(e) In this clause registered has the same

meaning as in the GSTAct.6.12 Additional Limits or Residential Units

(a) The maximum amount o the payment or loss tothe ownero a residential unitunder this policywill be reduced where the BSA has a liability to

pay a claim, or has paid a claim, at the time oloss in relation to any o the common propertyo the community titles schemeo which theresidential unitorms a part.

(b) The amount o this reduction is calculated inaccordance with the ollowing ormula:

Amount = F x GWhere:

F is the amount paid or payable in relation to the commonproperty;

G is the Insureds lot entitlement as a proportion o the sumo the lot entitlements in the community titles scheme, or,

i there is no community titles scheme, then G is the foorarea o the residential unitas a proportion o the total foorarea o the building or buildings (excluding any car park) towhich the claim or common propertyrelates.


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6.13 Additional Limits Where CommercialWorks are Involved

(a) Subject to the terms o this policy, wherethe insured work is contained in a buildingor buildings (building) that incorporatesboth residential purposes and commercialpurposes, the BSAs liability to the Insuredunder Parts 4 or 5 o this policy in relation to

common propertyis limited to:(i) where there is a community titles

scheme, an amount calculated inaccordance with the ollowing ormula:

or

(ii) i there is no community titles scheme,

an amount calculated in accordancewith the ollowing ormula:

(b) For the purpose o this clause, loss isthe total cost to rectiy deects or remedy

subsidence and settlement damage tocommon property.

6.14 Other Insurance

(a) I any loss insured by this policy is coveredby any other policy or policies o insurance

(relevant policies), the BSA will pay onlythe amount in excess o the amount payableunder any relevant policies.

(b) I the Insuredelects not to claim or pursuepayment or indemnity under any relevant

Lot entitlement oresidential units in

building

Total lot entitlement obuilding

Liability = Loss x

Floor area oresidential units in

building

Total foor area obuilding (excluding anycar park and common

property)

Liability = Loss x


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policies, the BSA will only be liable to paythe Insuredthe amount in excess o theamount that would have been payable underany relevant policies.

(c) The Insuredshall notiy the BSA in writing oany insurance or insurances already eectedcovering, whether in whole or in part, theproperty or liability hereby insured.

6.15 Eect o Release o ContractororProvision o Indemnity

(a) Where the contractoror other person has beenreleased rom any liability in relation to theinsured works the BSA is thereby released rom

liability under this policy to the same extent.(b) Where the contractoror other person has

been indemnied by the Insuredin relationto the insured works the Insuredtherebyreleases the BSA rom liability under thispolicy to the extent o that indemnity.

6.16 Process or Assessment o Claims underPart 1

Where a claim is made under Part 1 o this policyand a subsequent claim is made under either Parts2 or 3 o this policy, the claim under Part 1 is to

be assessed rst. To remove doubt, where claimsare assessed concurrently the claim under Part 1 isdeemed to be assessed rst.

PART 7: GENERAL EXCLUSIONS

7.1 Completion or Rectiication WithoutApproval

The BSA may reuse to make a payment or lossunder this policy where residential construction

workhas been completed or rectied (asapplicable)without the prior written approvalothe BSA.


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7.2 Subsequent Purchasers

Where the Insuredpurchased the landon which

residential construction workhas been perormed,the Insuredis NOT ENTITLED to payment orloss under Parts 2, 3, 4 or 5 o this policy wherethe damage, destruction, deect, subsidence orsettlement was, in the opinion o the BSA, evidentprior to completing the contractto purchase the land.

7.3 Alterations and Additions

Where the residential construction workinvolvesprimary building workto an existing residenceor related rooed building the Insuredis NOTENTITLED to payment or loss under this policy

or any deects or subsidence or settlement whichoccurs in relation to that existing residence orrelated rooed building other than those whichare directly caused or contributed to by theperormance o the residential construction work.

7.4 Other Exclusions

The Insuredis NOT ENTITLED to payment or losswhere the loss is caused by or contributed to by:

(a) deective design:

(i) in the case o a multiple storey dwelling(and subject to clause 7.6) - where theInsuredis the person who contractedwith the engineer, architectorbuilding designeror the design o theresidential construction work; or

(ii) in any other case - unless the designwas prepared by or on behal o thecontractoror by:

an engineer;

an architect; or

a building designer; or

(b) the gradual deterioration o the residentialconstruction workcaused by air wear andtear or by the lack o maintenance or neglecto the Insured; or

(c) the ailure o any person other than the


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contractoror the contractors agent, employee,subcontractor, supplier or invitee to undertakereasonable maintenance, inspectionsand treatments or to carry out reasonablerecommendations given by the BSA; or

(d) pressure waves caused by aircrat or otheraerial devices; or

(e) earthquake, erosion, food, landslip, tidal

wave, change o water course, ailure oarticial devices or the storage or conveyanceo water or gas (unless constructed as parto the residential construction workby thecontractor), or accidental damage; or

() in relation to public or legal liability or thepayment o compensation in respect o death,bodily injury or illness, occurring on thepremises during the period o insurance, orloss suered as a result o deective products.

Other than as provided in Parts 2 and 3 o this

policy the Insuredis NOT ENTITLED to payment orloss where the loss is caused by or contributed to by:

(a) the act, omission or inaction o any personother than the contractoror the contractorsagent, employee, subcontractor, supplier orinvitee;

(b) malicious damage, vandalism, thet includingorcible removal, storm, freand tempest.


The BSA is not liable under this policy:

(a) in relation to vandalism or orcible removal,where the damage is caused by any personwho is acting with the express or impliedconsent o either the Insuredor someone withthe Insureds authority;

(b) in relation to vandalism caused by theInsured, or the Insureds agent or invitee;

(c) where the loss is caused by someone whohas entered the residential construction workor the site o residential construction work


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with the consent o the Insuredor the consento someone with the Insureds authority;

(d) in relation to public or legal liability orthe payment o compensation in respect odeath, bodily injury or illness, occurringon or arising rom the premises during theperiod o insurance, or loss suered as aresult o deective products;

(e) or loss to other property, including adjoiningproperties as a result o vandalism, orcibleremoval, fre, storm or tempestoccurring on,emanating rom or otherwise aecting theresidential construction worksubject to thispolicy;

() cost o removing tree stumps or any part o atree that has not allen or caused damage tothe residential construction work.

7.6 Insuredas the Contractoror an Associateo the Contractor

(a) Where the Insuredis:

(i) a building contractor(other than asubcontractor); or

(ii) an associate o a building contractor;

and that building contractorhas perormedor caused perormance o the residentialconstruction workthen the Insuredis notentitled to payment or loss under Part 1 (Non-Completion) or Part 4 (Deective Construction) othis policy in relation to the insured works.

(b) For the purposes o clause 7.6(a) an Insuredis taken to be an associate o a buildingcontractori:

(i) in the case o the building contractorbeing a company the Insuredis:

an ocer o the company;

an individual, other than an ocero the company, who is in a positionto control or substantially infuencethe conduct o the companys aairs,including or example, a shareholder


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with a signicant shareholding, anancier or a senior employee;

the spouse (including a de acto spouse) or child o an ocer o thecompany or an individual, otherthan an ocer o the company,who is in a position to control orsubstantially infuence the conducto the companys aairs, includingor example, a shareholder with asignicant shareholding, a nancieror a senior employee;

a trustee o a trust where thecompany, or another entity that is anassociate o the company because oanother sub-paragraph o this clause,benets or is capable o benetingunder the trust;

another company whose majorityvoting interest is held by thecompany; or

another company who holds a majorityvoting interest in the company.

(ii) in the case o the building contractorbeing an individual the Insuredis:

the spouse (including a de acto

spouse) or child o the individual;a trustee o a trust where theindividual, or another entity that is anassociate o the individual because oanother sub-paragraph o this clause,benets or is capable o benetingunder the trust;a company whose majority votinginterest is held by the individual; or

a company in which the individual,the individuals spouse (including a de

acto spouse) or child is in a positionto control or substantially infuencethe conduct o the companys aairs,including or example, a shareholderwith a signicant shareholding, anancier or a senior employee.


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(c) Where the Insuredis a building contractor(other than a subcontractor), and hasperormed or caused perormance o theresidential construction work, then theInsuredis not entitled to payment or lossunder Part 5 (Subsidence or Settlement) othis policy unless:

(i) the residential construction workinquestion is the contractors permanentresidence; and

(ii) the ooting was designed by anengineerand that design has beenaithully ollowed.

7.7 Carpet & Vinyl

The Insuredis not entitled to payment or loss whichrelates to repair, replacement or cleaning o carpetor vinyl foor coverings irrespective o whether theyare deective, damaged or improperly installed.

7.8 Terrorism

(a) This policy excludes loss, damage, cost, orexpense directly or indirectly caused by,contributed to by, resulting rom, or arising outo or in connection with any act o Terrorism,as dened herein, regardless o any other

cause or event contributing concurrently or inany other sequence to the loss.

(b) This policy also excludes loss, damage, cost,or expense directly or indirectly caused by,contributed to by, resulting rom, or arisingout o or in connection with any action in

controlling, preventing, suppressing, retaliatingagainst, or responding to any act o Terrorism.

7.9 Electronic Data

This policy does not insure:

(a) total or partial destruction, distortion,erasure, corruption, alteration,misinterpretation or misappropriation oelectronic data;

(b) error in creating, amending, entering,


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deleting or using electronic data; or

(c) total or partial inability or ailure to receive,

send, access or use electronic data, or anytime or at all, rom any cause whatsoever,regardless o any other contributing cause orevent whenever it may occur.

7.10 Entitlements Subject to theAct

Notwithstanding anything stated in this policy, theInsuredis not entitled to a claim, payment or otherentitlement under this policy i it is prohibited by orcontrary to the Actor Regulation.

Example section 70A o the Act

70A Persons not entitled to indemnity underinsurance scheme

(1) A building contractor who carries outspeculative residential construction work isnot entitled to indemnity under the statutoryinsurance scheme or the work.

(2) Where a person has entered into 1 or morebuilding contracts, in orce at the sametime, to construct 3 or more living units, theperson is not entitled to indemnity under thestatutory insurance scheme or the work.

(3) For subsection (2)

(a) a single detached dwelling is taken to be1 living unit; and

(b) a residential unit is taken to be 1 livingunit; and

(c) a duplex is taken to be 2 living units.

(4) A policy o insurance or residentialconstruction work, in the terms stated inthe boards policies, may include othercircumstances in which a person is notentitled to indemnity under the statutoryinsurance scheme.

(5) Nothing in this section aects the right o asubsequent owner o residential constructionwork mentioned in this section to claimindemnity under the statutory insurancescheme.


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PART 8: CLAIMS

8.1 Procedure or Claims

(a) Prior to making a claim under this policyor deective construction or subsidenceor settlement, the Insuredwill (except in

the case o insolvency or death o thecontractor) notiy the contractoro the actsand circumstances giving rise to the claimand will allow the contractora reasonableopportunity in which to rectiy the deects orsubsidence or settlement.

(b) All claims will be in writing and will be insuch orm and contain such inormation asthe BSA may direct.

8.2 Admission o Claims

Beore admitting a claim, the BSA will determine

whether a direction should be made requiring thecontractorto rectiy the residential construction work.

8.3 Duty o Good Faith

(a) The Insuredhas a duty to the BSA to act inutmost good aith in respect o any matter

arising under or in relation to this policy.

(b) This duty includes, but is not limited to, aresponsibility to disclose to the BSA everymatter the Insuredknows, or could reasonablybe expected to know, which may be relevantto a determination o the liability or the extento the liability o the BSA to pay a claim underthis policy.

(c) I the Insuredails in the duty o utmost goodaith, the Insuredis liable to pay the BSA anyamount paid in excess o the BSAs actual

liability to pay or loss under this policy, andthe BSA may recover such sum accordingly.

8.4 Subrogation

The BSA is subrogated to the rights o the Insured


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to the extent o any payment it has made orundertaken to make.

PART 9: PAYMENTS

9.1 Payment

Where the BSA admits a claim under this policy,the BSA may, at its own discretion, and in ulldischarge o its liability, do any o the ollowing:

(a) pay the amount o the claim to a licensedcontractorengaged by the Insuredwith theapproval o the BSA to rectiy or complete

the insured works; or(b) arrange and pay or the rectication or

completion o the insured works by alicensed contractorappointed by the BSA tothe extent o the Insureds entitlement; or

(c) pay the amount o the claim to the Insured; or(d) pay such part o the amount o the claim

which is to be used or rectication orcompletion o the insured works to a licensedcontractorand any balance to the Insured; or

(e) pay the amount o the claim or any part oit to a body corporate in payment o anycontribution or levy owing by the Insuredunder the Body Corporate and CommunityManagement Act 1997; or

() pay the amount or part o the amount o a

claim made by a body corporate to one ormore lot owners in the community managementscheme to which the claim relates.

PART 10: REVIEWABLE DECISIONS

10.1 Decisions o the BSAwhich are Reviewable

Section 101 o the Commercial and ConsumerTribunal Act 2003 provides that the Tribunalmay


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review a reviewable decision or which the Tribunalis given jurisdiction under an empowering Act.Section 86 o the Queensland Building ServicesAuthority Act 1991 provides that the Tribunalmayreview the ollowing decisions o the BSA:

adecisionaboutthescopeofworkstobeundertaken under the Statutory InsuranceSchemeto rectiy or complete tribunalwork; or

adecisiontodisallowaclaimundertheStatutory Insurance Schemewholly or inpart; or

adecisionthatadomesticbuildingcontracthas been validly terminated

having the consequence o allowinga claim or non-completion under theStatutory Insurance Scheme.

10.2 Application or Review

(a) I the Insuredis aected by a reviewable

decision o the BSA, the Insuredmay applyto the Tribunalor a review o the decisionin accordance with Section 102 o theCommercial and Consumer Tribunal Act 2003.

(b) An application to review a decision o theBSA must be made within 28 days ater the

Insuredreceives written notice o the decision.

PART 11: DEFINITIONS ANDINTERPRETATION

11.1 DeinitionsIn this policy

Act means the Queensland Building Services AuthorityAct 1991;

architect means a person registered as an architect

under the Architects Act 2002;associated building work means associated buildingwork as dened in Section 12 o the Regulation;

BSA means the Queensland Building Services Authority;

building designer means a person who holds a licence


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under Parts 11,12 or 13 o the Regulation operatingwithin the scope o work permitted within the scope othe licence;

building work means building work as dened inSchedule 2 o the Act;

category 1 deect means building workthat is aulty orunsatisactory because it either:

(a) adversely aects the structural perormance o abuilding;

(b) adversely aects the health or saety o personsresiding in or occupying a building;

(c) adversely aects the unctional use o thebuilding; or

(d) allows water penetration into a building.

category 2 deect means building workthat is aulty or

unsatisactory, other than a category 1 deect, because:(a) it does not meet reasonable standards o

construction or nish; or(b) it has caused a settling in period deect in a new

building.

certifcate means certicate o insurance issued underthe Act;

commercial purposes means purposes other than thoserelated to residential occupancy or other than or thepurpose o using a residence or residential purposes;

common property means common property as denedby the Body Corporate and Community Management Act1997;

community titles scheme means community titlesscheme as dened by the Body Corporate andCommunity Management Act 1997;

contract means a contract or the perormance o theresidential construction workreerred to in the certifcate,or, where there is no certifcateissued, a contractor the

perormance o residential construction workwhich isaorded the benets o this policy by virtue o the Act;

contracted works means the residential constructionworkto be perormed under a contract;

contractor means:

(a) the licensed contractorreerred to in the certifcate; or(b) where there is no certifcate, a contractor who

holds a licence which appears to signiy that thecontractor may enter into contracts with consumersto carry out residential construction workcoveredby the Statutory Insurance Scheme, who entersinto a contractwith a consumer to carry out


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residential construction workor otherwise carriesout residential construction workother than as asubcontractor; or

(c) a person raudulently claiming to hold a licencepermitting that person to enter into contracts withconsumers to carry out residential constructionworkcovered by the Statutory Insurance Scheme,who enters into a contractwith a consumer tocarry out residential construction work.

cost escalation clause means a provision o a domesticbuilding contractunder which the amount to be paid bythe consumer may be increased to refect increased costso labour and/or materials and/or in consequence odelays in carrying out the work;

defned event

(a) For Part 2 o this policy, means each single event

o vandalism or orcible removalo residentialconstruction workthat gives rise to a claim under thatPart;

(b) For Part 3 o this policy, means each single evento fre, storm or tempestwhich gives rise to a claimunder that Part.

duplex means a building which is a detached dwellingcomprising two residential units;

excess is the rst amount that must be contributed by theInsuredor each defned eventor which loss is claimed;

electronic data means acts, concepts and inormationconverted to a orm usable or communications, display,

distribution, interpretation or processing by electronicand electromechanical processing or electronicallycontrolled equipment and includes programs, sotwareand other coded instructions or such equipment;

engineer means a person who is a registered proessionalengineer under the Proessional Engineers Act 2002;

fre re or explosion excluding:

events where there is no fame (e.g. scorching); orre that has not escaped the normal connes o acooking, heating or electrical appliance; orre occasioned by or happens through:

spontaneous ermentation or heating orits undergoing any process involving the

application o heat; orearthquake or subterranean re; orriot, civil commotion, war, invasion, act ooreign enemy, hostilities (whether war isdeclared or not), civil war, rebellion, revolution,insurrection or military or usurped power; or


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arson, vandalism, orcible removalor otherunlawul act; or

explosions resulting in a claim or liquid damage to

residential construction work.fxed price means a price which is certain, except orthe eect o provisional costs or sums, prime costs orsums, variations and any cost escalation clause;

ooting system includes under slab plumbing anddrainage;

orcible removal the application o orce to removexed standing workwithout the express or impliedconsent o the owner;

GST has the same meaning as in the GST Act;

GST Act means A New Tax System (Goods andServices Tax) Act 1999as amended;

input tax credit has the same meaning as in the GST Act;

input taxed has the same meaning as in the GST Act;

Insured means:

(a) the ownero the land; or(b) a consumer who has entered into a contractwith

the contractorto have residential constructionworkcarried out in Queensland;

land means the land upon which the residentialconstruction workis or is to be constructed and includesa lot or common propertyin a community titles scheme;

multiple storey dwelling means a building o not more

than three storeys in height (excluding the lowest leveli it consists only o a car park) comprising at least oneresidential unit, whether or not the building also includesone or more commercial purposes or uses;

owner o landmeans:

(a) or reehold land- the registered owner o the landunder the Land Title Act 1994; or

(b) or landheld under a statutory lease or licencegiving a right to possession o the land- the lesseeor licensee; or

(c) or landin respect o which there is adetermination o the type reerred to in the NativeTitle (Qld) Act 1993 - a body corporate which

by virtue o that determination has the exclusiveright to regulate possession, occupation, useand enjoyment o residential construction workconstructed on that land;

(d) or common propertyunder the Body Corporateand Community Management Act 1997- the body


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corporate.

practical completion means when the works arecomplete in accordance with the contractand allrelevant statutory requirements and inspections havebeen satisactorily completed or the works are occupied,whichever is rst;

preparatory work means all work undertaken inrelation to preparation, design, obtaining building and/or development approvals and site works, including (but

not limited to) earthmoving, to make the site ready or theresidential construction work;

primary building work means primary building workas dened in Section 11 o the Regulation;

prior written approval, or Parts 2, 3 and 7, meanswritten approval provided by the BSA to the Insured

speciying work approved to be perormed, but does notinclude:

(a) the issuing o a certifcateo insurance;(b) the issuing o a policy or residential construction

work; or(c) the issuing o a scope o work or variation o a scope

o work.

properly terminated means lawully under the contractor otherwise at law, upon the contractors deault whichextends to, but is not limited to:

(a) the cancellation or suspension o the contractorslicence; or

(b) the death or legal incapacity o the contractor; or

(c) the insolvency o the contractor; or(d) any breach o the contractby the contractor.

Regulation means the Queensland Building ServicesAuthority Regulation 2003 as amended;

related rooed building means a related rooedbuilding as dened by Section 9 o the Regulation;

residence means residence as dened by theRegulation;

residential construction work means residentialconstruction work as dened in Section 10 o the Regulation;

replacement value means any costs which would bereasonably incurred in respect o:

(a) replacing (not necessarily on the same land) orreinstating the building to a condition substantiallythe same as, but not better or more extensive,when new; and

(b) demolition and removal o debris to the extent


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that it is essential to enable the building to bereinstated or the site cleared;

residential unit means a part o a building designedor separate occupation as a residence;

standing work means residential construction workcarried out under a fxed pricecontract, i:

(a) the contractis between the contractorand theInsured; and

(b) the work is carried out by the contractor; and

(c) the work has been commenced but not completed inaccordance with the contract; and

(d) the Insuredhas properly terminatedthe contractpriorto the completion o the work;

However, standing workdoes not include any o theollowing:

(e) work that is preparatory workonly;() materials or goods not supplied by the contractororthe contractors agent;

(g) any building workthat existed prior to thecommencement o the residential construction work.

Statutory Insurance Scheme or Scheme means theinsurance scheme established under Part 5 o the Act;

storm a violent atmospheric disturbance producingstrong wind, including cyclones, which may beaccompanied by rain, lightning, thunder, hail or snow.A storm does not include:

persistent bad weather, or heavy or persistent rainby itsel;

water rising up rom the ground, whether throughnatural causes or not;an increase in sea level, including tsunami or otherstorm surge.

supply has the same meaning as in the GSTAct;

taxable supply has the same meaning as in the GST Act;

tempest a violent storm, agitation or tumult;

Terrorism means any act or preparation in respecto action, or threat o action designed to infuence thegovernment de jure or de acto o any nation or anypolitical division thereo, or in the pursuit o political,religious, ideological, or similar purposes to intimidate

the public or a section o the public o any nation by anyperson or group(s) o persons whether acting alone oron behal o or in connection with any organisation(s) orgovernment(s) de jure or de acto, and which:

involvesviolenceagainstoneormorepersons;or


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involvesdamagetoproperty;or endangerslifeotherthanthatoftheperson

committing the action; or

createsarisktohealthorsafetyofthepublicor a section o the public; or

isdesignedtointerferewithordisruptanelectronic system.

Tribunal means the Commercial and Consumer Tribunal;

vandalism means wilul or unlawul damage or

destruction o residential construction work, includingarson, without the consent o the Insured;

Work has been commenced, or standing workunder this policy, means the contractorhas physicallycommenced work (other than preparatory work) underthe contractto do either o the ollowing:

(a) construct the permanent ooting system o a buildingcomprising residential construction work; or(b) i no ooting system is to be constructed under the

contract, change the existing structure o a buildingcomprising residential construction work.

11.2 Interpretation

(a) Unless the contrary intention appears,wherever terms dened by the Actor theRegulation appear in this policy, those termshave the same meaning in this policy as in theActor the Regulation when the policy comesinto orce.

(b) Headings are or convenience only and arenot to be used in interpreting this policy.


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aunits

houses

drainage

tow

nhouses

rowh

ouses

duplexe

s

terracehouses

kitchens

bathrooms

terms and conditions of insurance 2

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