Hiring an unlicensed demolition contractor is rarely a small saving. The legal and financial risks of the wrong hire land squarely on the homeowner — sometimes years after the project is finished. Licensing and insurance aren't paperwork formalities; they're the financial protections that turn a $25,000 demolition contract into a project where the homeowner's exposure is limited to the contract price. Without them, the exposure can extend to six or seven figures.
What licensing actually means
In Victoria, demolition work requires registration through the Victorian Building Authority (VBA) under the relevant building practitioner category. Asbestos removal requires separate licensing through WorkSafe Victoria — Class A for friable asbestos, Class B for bonded.
Licensing requires the practitioner to demonstrate:
- Relevant qualifications and experience
- Insurance held to the specified levels
- Compliance with continuing professional development
- No disqualifying past offences
- Good standing — no current suspensions or cancellations
The registration is renewable annually. Lapsed registrations are publicly visible. Cancelled or suspended practitioners are listed publicly. None of this protects you against a bad contractor automatically — but it gives you the verification tools to avoid one.
Why the homeowner is exposed if licensing is missing
The Victorian Building Act and Regulations create specific duties on the homeowner that are usually delegated to a registered practitioner:
- Ensuring the demolition is properly permitted
- Engaging a competent person to supervise high-risk construction work
- Ensuring the work meets the building regulations
When the homeowner engages a registered builder, those duties transfer through the contract. When the homeowner engages an unlicensed person, the duties stay with the homeowner — and so does the liability if something goes wrong.
The four insurance covers that matter
1. Public liability insurance
Protects against third-party property damage and personal injury arising from the work. If the demolition damages a neighbour's home, or a passer-by is injured, public liability is what covers the claim. Should be a minimum of $20 million for residential demolition; $50m+ for commercial.
2. Workers compensation
Compulsory in Victoria for all employers. Covers worker injuries on the job. Crucially, if the contractor doesn't have it, an injured worker can pursue the homeowner directly under occupier's liability — even though the homeowner had nothing to do with the worker's employment.
3. Asbestos liability cover
Some general liability policies exclude asbestos work, or cap the cover at very low levels. If you're hiring for asbestos work specifically, ask whether the public liability extends to asbestos and at what limit.
4. Domestic Building Insurance (where applicable)
Required for residential work above $16,000 in Victoria where the contractor is a registered builder. Provides cover for incomplete or defective work after the contract has ended. Usually purchased project-by-project; the certificate of insurance should be provided to the homeowner before the second progress payment.
Insurance certificates are easy to fake. Ask for the certificate to be issued through the insurer or broker directly to you, in your name as a beneficiary or interested party. Unsolicited PDFs from the contractor can be doctored.
Real-world consequences of skipping these checks
Scenario 1 — Damage to a neighbour's property
An unlicensed demolition crew working on a tight Brunswick lot accidentally damages a neighbour's adjoining brick wall. Repair cost: $40,000. The contractor has no insurance and no assets. The neighbour sues the homeowner under occupier's liability. The homeowner pays the $40,000 plus legal costs.
Same scenario with a licensed and insured contractor: the contractor's public liability insurance pays the $40,000. The homeowner pays nothing.
Scenario 2 — Worker injury
An unlicensed demolition worker falls from a half-demolished structure and breaks both legs. The contractor has no workers compensation. The worker pursues the homeowner under occupier's liability for medical costs and lost income. Settlement: $250,000.
Same scenario with a licensed contractor: WorkCover Victoria handles the claim. The homeowner has no liability.
Scenario 3 — Asbestos contamination
Unlicensed crew removes bonded asbestos without proper containment. Fibres contaminate the homeowner's neighbour's vegetable garden and their air conditioning intake. EPA-mandated remediation: $80,000. WorkSafe fines on the homeowner (as the duty-holder for asbestos work on their property): $35,000.
Same scenario with licensed asbestos removal: properly contained, properly notified, properly cleared. No contamination, no fines, no neighbour claim.
How to verify licensing and insurance in 5 minutes
- VBA practitioner search — vba.vic.gov.au/Practitioner-and-Building-Search. Enter the contractor's name or registration number. Confirms current registration and any disciplinary history.
- WorkSafe asbestos licence search — worksafe.vic.gov.au has a public licence holders list. Confirms Class A or B asbestos licence currency.
- ASIC company check — asic.gov.au. If the contractor trades as a company, confirms ABN, current company status, directors. Useful to compare against the names on quotes.
- Insurance certificate of currency — request directly from the contractor. Ideally have it issued through the broker to you. Check the policy expiry date.
Five minutes of verification can save a six-figure problem.
What to do with the information
If verification confirms everything is in order: proceed with confidence. The contract gives you contractual remedies, the insurances cover catastrophic exposure, and the licensing protects you from regulatory liability.
If verification reveals problems — lapsed registration, expired insurance, mismatched company names — raise it directly with the contractor. There may be a legitimate explanation (the renewal is in process, the company restructured legally). There may not be. Either way, get clarity before signing.
The cost of legitimacy
Licensed and insured contractors usually quote 5–15% higher than unlicensed competitors, mostly because they actually pay for the registrations and insurance. That premium is the cheapest insurance you'll buy. More red flags here.
The 5–15% premium for legitimacy is small compared to the potential six-figure exposure of hiring without it. It's also smaller than the variations that often come from unlicensed contractors who price low to win and recover later.
For commercial work, this matters even more
Commercial demolition projects often have additional insurance requirements — professional indemnity, environmental impairment liability, project-specific insurances. The contract may also require performance bonds or bank guarantees. The principal contractor and project owners need verification of all of these before site access. Commercial projects without proper documentation simply don't proceed. Commercial difference detail.
The five-second decision
Ask the contractor: "Can you email me your VBA registration number, your asbestos licence number, and your current public liability certificate of currency in the next hour?" If the answer is yes and the documents arrive: you can proceed to the other checks. If the answer is anything else: you have your answer.
