Can Strata Insurance Cover Legal Costs in Disputes With a Dysfunctional Committee?

When engaging a solicitor to address issues with a dysfunctional committee, it's important to understand how this action interacts with strata insurance policies, particularly regarding the coverage of legal costs and the potential impact on insurance premiums.

• Legal costs for lot owners: Generally, the legal expenses incurred by a lot owner in pursuing action against the owners corporation or its committee are not covered under a standard strata insurance policy. As a lot owner, you would typically be responsible for bearing the cost of legal representation and any related expenses.
• Coverage for the owners corporation or committee: Conversely, the body corporate or committee might be eligible to claim under the strata insurance policy for legal costs incurred in defending against legal actions. Such coverage is contingent upon the specifics of the insurance policy, which may include legal defence costs as part of its protection for the owners corporation's officers and the committee.

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 and the specific coverage afforded under their policy wording. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.