The NSW Government is considering changing the builders’ warranty insurance scheme following the departure of providers Lumley Insurance and CGU.

The two insurers will quit the market by January 1, leaving an estimated 25% of builders applying for cover with three remaining insurers – Vero, QBE and Calliden.

Builders have since raised concern about a lack of available cover which is critical to their trade as they are legally prevented from building without it.

Builders’ warranty insurance provides cover to consumers should the builder die, disappear, become insolvent or have their licence cancelled.

NSW Minister for Fair Trading Virginia Judge told insuranceNEWS.com.au the Government is “keeping a close eye on the market”.

“We are also being advised by experts on the Home Warranty Insurance Scheme Board,” she said.

“Our primary concern has always been to make sure consumers have access to this safety net and builders can get the insurance cover they need to get on with the job,” she said.

“We are considering the situation and whether any changes are necessary. I am committed to seeking a fair solution and will not hesitate to take decisive action.”