Question: The owners corporation has permitted us to install solar panels on the roof. The by-law holds us accountable for any future damage caused by the panels. Do we need insurance to safeguard us against potential claims?
We recently received approval to install solar panels on the roof. The by-law includes a condition that indemnifies the owners corporation for any future damage caused by the solar panels.
Does indemnifying the owners corporation mean there would need to be insurance? Do I need to take out insurance to protect me against future claims?
Answer: While the by-law indemnifies the owners corporation for future damage, it may not necessarily prevent the lot owner from making a claim on the strata insurance policy for the damage caused by the solar panels.
The lot owner’s contents or landlord’s insurance should ideally include coverage for third-party liability. An indemnity does not require an insurance policy in place, notwithstanding the owner may have recourse on their contents/landlords (public liability section) or the strata insurance (property cover) for damage to the building associated with the solar panels.
If the solar panels cause damage to the property, this insurance coverage can provide a potential avenue for addressing any related claims.
However, it’s important to note that the contents or landlord’s policy might contain exclusions for contractual liability.
Contractual liability exclusions typically apply when you agree to be liable for something solely due to an agreement or contract you have entered into. Therefore, it is crucial to review the policy’s exclusions to determine if any contractual liability exclusion may impact coverage.
It’s worth noting that while the by-law indemnifies the owners corporation for future damage, it may not necessarily prevent the lot owner from making a claim on the strata insurance policy for the damage caused by the solar panels.
As the owner is an insured party under the policy, and the policy covers the building, the owner has the right to file a claim for the damages under the strata policy.
Consequently, despite indemnifying the owners corporation for any damage caused, the lot owner may still have the option to seek compensation through the strata insurance policy.
This post appears in the July 2023 edition of The NSW Strata Magazine.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.