This article about public liability insurance has been supplied and written by Whitbread Insurance Brokers and Simon Plummer, StrataRatings.
Question: We are currently trying to gain access to a neighbouring property to perform render repairs and paint but the owner has stipulated that he be fully indemnified for loss or damage to his property whilst work is in progress.
I am on the strata committee for a block of apartments on The Central Coast, NSW.
We are currently trying to gain access to a neighbouring property to perform render repairs and paint but the owner has stipulated that he be fully indemnified for loss or damage to his property whilst work is in progress.
The company that is contracted to perform the work has its own public liability and worker compensation insurances. We currently have public liability but this does not include employees as this is supposedly covered under another insurance provided by Icare.
Is there such a clause in a public liability policy that can be amended to state that “Noting the landowner’s interest; Referring to the landowners as the risk situation”.
If you are able to give us any information it would be greatly appreciated.
Answer: A potential solution would be to have the repairer provide the letter of indemnity to the neighbour.
On the basis that a scheme holds appropriate legal liability cover with a strata insurer, it is likely that its interests will be fully protected in the case damage occurs to the neighbouring property in undertaking maintenance works. The scheme will likely have $20,000,000 cover which is the legal minimum in NSW, however, this can be easily increased.
The major strata insurers usually provide this liability cover in the case the Owners Corporation is sued from an incident connected with the ownership of the property. Conducting repairs and maintenance is very much to do with the ownership of the property and as such cover should exist.
Be aware however that if the work is major, usually $500,000 or more, you will need to ask for the insurers written consent to ensure the scheme is protected. You will need to check your policy to see the requirements here.
Many policies also have an exclusion whereby they will not cover the scheme’s liability if the liability has arisen solely from the terms of an agreement and that there would be no liability if it weren’t for the agreement. The wording of any indemnification agreement with the neighbour would have to be written in a way that wouldn’t activate this exclusion so tread carefully here.
The inclusion of an additional clause in the liability policy would generally not be allowed by your strata insurer however you can always ask.
A potential solution would be to have the repairer provide the letter of indemnity to the neighbour. That way any damage occurring to the neighbouring property will be the responsibility of the repairer.
This post appears in Strata News #223
Please note this response is not intended to provide advice of any type and merely discusses the issue broadly. Professional assistance should be sought should you require personal advice.
Question: What does public liability insurance include?
What does public liability insurance include?
Who pays the excess when a claim is made under public liability insurance in a strata scheme?
EG. what happens if an owner spills milk and cleans it up, but someone slips anyway because it was not cleaned properly on common property in NSW. Is the owner protected by public liability insurance and does the owner pay the excess or the Owners Corporation collectively? We are talking about an accident, not malice.
Answer: Public Liability under a Strata policy insures against the death or injury to a person, or damage to property for which the Owners Corporation could be held legally responsible and required to pay compensation for.
Public Liability under a Strata policy insures against:
- The death or injury to a person, or
- damage to property;
for which the Owners Corporation could be held legally responsible and required to pay compensation.
If an excess is applicable under the policy, it is generally paid by the Insured.
Strata Insurance policies are intended to cover the Owners Corporation for losses that occur in a common area that they can be held legally responsible for. In the aforementioned scenario, a claim may be lodged under the Public Liability section of the Strata policy and the insurer will consider if there is any liability attaching to the Owners Corporation. If an excess is to be paid, it will be paid by the Insured.
Public Liability insurance should also be considered by individual lot owners for any special circumstances involving their lot and not covered by the insurance taken out by the Owners Corporation.
This post appears in Strata News #130.
For more Strata Insurance and risk advice please contact:
Lia De Sousa
Whitbread Insurance Brokers
Check your tradie has the right tools for the job – insurance tools that is!
Even though the ‘tradie’ you engage to carry out works on behalf of the Owners Corporation may turn up with the right tools and skills for the job, your responsibility is to check they have the right insurance cover.
Recently an Owners Corporation committee asked us to review the public liability insurance of a building maintenance company to ensure that the interests of the Owners Corporation were protected. This was a wise move on behalf of the committee, as negligence in this area could lead to an OC exposing themselves to a potential Liability claim.
When you arrange for a Tradesperson to perform work at an Owners Corporation, it is vital that you check that the company they work for has public liability insurance. Simply getting a, “Yes I do!” from the tradesperson is not sufficient. You must ask them to provide you with a Certificate of Currency, which they can obtain from their insurer.
Holger Schnabel from Whitbread Insurance Brokers says “Best practice is keeping a register of all of the tradespeople used by the Owners Corporation and note that a copy of the Certificate of Currency has been sighted and kept for reference. This register is then reviewed annually to ensure public liability insurance cover is up to date. This applies also to caretakers.”
If a tradesperson, whilst carrying out work on the Owners Corporation property, were to cause or are alleged to have caused third-party property damage or personal injury, this could result in a claim being brought against the tradesperson and the Owners Corporation.
A common misunderstanding is that owners or tenants who act as caretakers or handymen are covered under the liability section of the strata insurance policy; this is not correct. They too must have public liability insurance in their own name. This applies to an owner or tenant who performs general maintenance work on behalf of the Owners Corporation.
Whitbread can assist you to arrange public liability insurance to cover owners and tenants, who act as caretakers, performing maintenance work on behalf of the Owners Corporation. Whitbread has sourced a policy at a competitive premium rate, based on an annual turnover of up to $20,000. This policy provides cover for minor maintenance and common area cleaning. Plumbing and electrical work are excluded.
Our recommendation is simple, don’t hire or engage anyone who doesn’t carry a current Public Liability policy and ensure you hold a current Certificate of Currency on file. A minimum recommended level of cover is $10,000,000.
If you would like assistance organising public liability insurance, contact Whitbread Insurance Broker’s Strata Insurance Broking team by calling 1300 424 627.
Please note this information is not intended to be personal advice and you should not rely on it as a substitute for any form of advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information.
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This post appears in Strata News #276.