You will require this approval if you intend to operate an approved fidelity fund scheme. Approved fidelity fund schemes issue fidelity certificates to builders. A fidelity certificate is an alternative form of insurance that builders can apply for instead of obtaining a residential work insurance (also known as housing indemnity insurance). Builders require this insurance / protection for:
- Construction of certain kinds of residence; and
- Certain alterations or additions to certain kinds of existing residence where the work is valued at over $12 000.
Fidelity insurance provides cover of up to $85 000 for incomplete or defective work in circumstances where the builder becomes insolvent, disappears or dies.
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