QBE and Calliden have stepped in to ensure the ongoing viability of the privatised builders’ warranty insurance scheme in South Australia following the departure of Vero from the market.

The state’s Consumer Affairs Minister, Gail Gago, has announced an “in principle agreement with QBE and Calliden to help manage the transition of builders insured with Vero”.

The agreement follows the withdrawal of Vero from the national builders’ warranty market from June 30 and comes a month after a similar arrangement was negotiated in WA.

Vero’s decision to exit the market followed the earlier withdrawal of Lumley Insurance and CGU.

Ms Gago says the agreement will ensure builders previously insured with Vero can continue to access the cover, which is mandatory for all significant residential building works. She says QBE and Calliden will undertake a formal assessment of every Vero client over the next 12 months.

Calliden CEO Nick Kirk says the insurer “will continue to work with our intermediary partners in SA to ensure continuity and a seamless transition to the new arrangements”.

Builders’ warranty insurance covers loss or damage resulting from non-completion of building work, loss of deposit or breach of statutory warranty. The cover is contingent on the builder’s death, disappearance or insolvency.