QLD: Committee aware of asbestos in fire doors but won’t disclose to insurer — what should the body corporate manager do?

Question: The committee is aware of asbestos in the fire doors but do not wish to disclose this to the broker or the insurer. They’ve engaged an insurer directly. What should the Body Corporate Managers do in this scenario in terms of due diligence and compliance?

Answer: Does the insurer ask about whether there’s any asbestos in the building?

Firstly, does the insurer ask about whether there’s any asbestos in the building? So obviously, if they do, there’s a definite requirement to answer correctly on that. The other thing that you need to look at with asbestos is that I know there are policies in the market that have exclusions around asbestos. The third thing is, do you have a duty to disclose this information as a matter that’s relevant to the insurer’s decision to ensure you? If that’s questionable, I probably would suggest that you err on the side of caution.

From the Body Corporate Managers perspective, I would probably say to the committee ‘Look, this could be a matter that you need to disclose to the insurer. Your failure to do that could mean the insurer voids the policy at the time of a claim’, and I guess put it back on the body corporate that they should consider this in not disclosing.

If you’ve done that as a Body Corporate Manager, you’ve really fulfilled your duty to the client. The better thing to do would be just to refer it to the broker and have them deal with that issue and forward the advice from the broker to the committee.

Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 07 3899 5129

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 Advisernet Australia AFSL No 240549, ABN 15 003 886 687.