What is the difference between public liability insurance and errors & omissions indemnity?

As a builder, public liability insurance will cover you if you cause damage to someone’s property – or in some cases, injury. For example, a plank falls off a house you’re building and damages the neighbour’s house. Then it’s your public liability. 
Errors and omissions indemnity on the other hand covers you for your professional liability. For example, the owner of the house you’re building decides they’re not happy with some aspect of the service you provide, or failed to provide. Even if it’s some years after you complete the building!
By law, there are many things that a builder is liable for on every job – regardless of whether or not you have a written contract. Under both the Building Act and the Consumer Guarantees Act, a tricky customer can find plenty of reasons to take their builder to court.

Who is the insurer that underwrites these policies?

All our insurance and guarantee products are fully underwritten by CBL Insurance Limited, a specialized New Zealand insurance company with nearly 40 year’s experience servicing the building and construction industry. 
Established in 1973, they cover building contractors and home owners against such things as purchase risk, non-completion, defects risk as well as professional liability. They have reinsurance treaties with highly rated reinsurance companies, and currently have Standard and Poor’s BB+ (stable) and A.M. Best B+ (good) financial ratings.

What is the difference between insurance and a guarantee?

Put simply a guarantee means that in the event of a particular event happening, the guarantor will do something if the guaranteed party can’t or doesn’t. 

Insurance means that in the event of a particular insured event happening, the insurer will pay.
 
A simple comparison may help explain the difference:
 

INSURANCE	GUARANTEE
2 Party Contract (Builder or Owner and Insurer)	3 Party Contract (Builder, Owner & Surety Underwriter)
Duty of Utmost Good Faith	Disclosure: as in ordinary contract law
Cancellable (generally)	Non-cancellable
Calculates Premium Based on Losses	No Loss Anticipated, Fee for Service
Involves Transfer of Risk	No Transfer of Risk
No Reimbursement from Insured	Principal (Builder) Reimburses Surety Underwriter

So the Homefirst Builders Guarantee isn’t insurance – it meets the builder’s obligations if they can’t, and the underwriter will, if possible, seek recovery from the builder of all payments made by them.

Who are Builtin New Zealand?

We provide the support, administrative services and claims management of the Homefirst Builders Guarantee to members of Certified Builders Association of New Zealand, and to many other approved builders.  Our guarantees mean that homeowners can be confident before, during, and after the building of their home that the builder will complete the home in accordance with the Building Contract and that it will be defect free.

We also provide specialist insurance products to the building and construction industry, offering cover that is not available from the big insurance companies.

The people at Builtin New Zealand Ltd are experienced specialists in these products, and have been professional insurance brokers and underwriting agents for over 35 years.

Knowing the building trade is at the heart of our business and our staff have spent many years working in it on behalf of builders, subbies and homeowners.

What  are damages?

Damages are defined as “monetary compensation awarded through a court.”

How can you afford to offer lower prices?

We keep our costs down by doing as much as we can electronically, by email and over the internet.  We travel nationwide from our head office in Tauranga but keep our overheads low by not having offices around the country.  We can keep our prices lower because our customers come direct to us and can apply online, rather than going through a broker and paying commission.

What is your underwriter's Financial Strength Rating?

CBL Insurance Limited has a rating of BB+ provided by Standard and Poor's (Australia) Pty Limited on 10 May 2011 .

The Insurance (Prudential Supervision) Act 2010 requires Licenced Insurers to obtain a financial strength rating.  An insurer rated ‘BBB’ or higher is regarded as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments.

Standard and Poor's (Australia) Pty Limited

Superior	Excellent	Good	Adequate	Maybe Adequate	Vulnerable	Extremely Vulnerable	Regularity Action
AAA	AA	A	BBB	BB	B	CCC	R

Plus (+) or minus (-). The ratings for 'AA' to 'B' may be modified by the addition of a Plus or Minus sign to show relative standing within the major rating categories.