NAT: Q&A Public Liability Insurance in Strata

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This article is about public liability and strata insurance for volunteer workers.

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• QUESTION: We have water penetration issues into our ground floor unit. Strata are stalling with repairs. Can my Husband carry out the plumbing work?
• QUESTION: In a small strata scheme in NSW one owner has taken it upon himself to repair the roof. How can I inform him of the dangers to both himself and the owners corporation while still remaining a ‘nice neighbour’ in our small community?
• QUESTION: In QLD, what is the body corporate’s liability in the event of an injury or accident as a result of repairs not done on common property, particularly when they are aware of the issues?
• QUESTION: In QLD, does Body Corporate Insurance cover voluntary workers? Does it cover the onsite manager if they were to get injured say carrying sandbags which is not in the normal scope of their work?
• QUESTION: We are currently trying to gain access to a neighbouring property in NSW 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.
• QUESTION: What does public liability insurance include?
• ARTICLE: Check your tradie has the right tools for the job – insurance tools that is!

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Question: We have water penetration issues into our ground floor unit. Strata are stalling with repairs. Can my Husband carry out the plumbing work?

We have water penetration issues through our ground floor bedroom unit’s sliding door.

Strata are stalling with the repairs because they are expensive. To fix the problem, the courtyard needs drainage and the sliding door needs to be re-sealed.

If my husband knows what he is doing, can he install the drainage in the yard or does the work have to be performed by a licensed tradesperson?

Answer: We would always recommend plumbing works such as drainage be completed by a licensed and insured tradesperson arranged via your strata manager.

Rod Smith
The Strata Collective
E: [email protected]
T: 02 9879 3547

This post appears in Strata News #448.

Question: In a small strata scheme in NSW one owner has taken it upon himself to repair the roof. How can I inform him of the dangers to both himself and the owners corporation while still remaining a ‘nice neighbour’ in our small community?

We live in a small townhouse complex of 5 units in NSW where each owner has a footprint on the ground and a roof above. Recently, one of our owners was up on the roof. Apparently, he, and one of the other owners had experienced some leaks. He had been to Bunnings and was repairing the roof himself. The building is 3 levels high.

When I tried to explain that I’m uncomfortable with unlicensed people doing repairs, he dismissed me and said he wasn’t repairing my unit’s roof, and it would save us all money. I was accused of being over bureaucratic and that because he was being careful, there was no risk of an accident. I tried to explain to him that it isn’t his roof to mend, and that he is not insured for any accident or the owners corporation for poor workmanship.

I’m the chair, and because there are only 5 owners it makes it difficult for me because I also need to maintain good relationships with my neighbours, who already dismiss strata regulations as ‘nit-picking’. What is the Law on this? and any suggestions on how best to handle it?

Answer: Always use a licensed, insured tradesperson for jobs such as fixing the roof

Do you have a strata manager? Because comments are spot on but in a small block of 5, I don’t think it should be you that is firing the bullets. I think it should be the strata manager who’s having the awkward but necessary conversation with the well-intentioned person who’s climbing up a roof. You need someone who is experienced with working on roofs.

People think their strata lot is their home, however, common property is the responsibility of all owners.

What I strongly suggest is to ensure a licensed, insured trade who is experienced with working on roofs to fix your roof. Even if it costs a few hundred dollars, because the risk is absolutely massive should there be an accident.

If you don’t have a strata manager, I wouldn’t confront the person alone. I would perhaps do that with the rest of the committee and just say ‘look I want to talk about this, I really am concerned…’ and handle it that way so as it’s not just you vs him.

Rod Smith
The Strata Collective
E: [email protected]
T: 02 9879 3547

This post appears in Strata News #392.

Question: In QLD, what is the body corporate’s liability in the event of an injury or accident as a result of repairs not done on common property, particularly when they are aware of the issues?

Answer: Onsite managers are generally contracted to provide services to the body corporate and are therefore not considered volunteers or employees.

Liability claims are considered on a case by case scenario by insurers, solicitors & judges (if the claim ends up in court) and for this reason, it is not possible to give a “one size fits all” answer.

For injury claims, the claimant must demonstrate the body corporate had a duty of care to the injured party.

Once that duty of care has been established, the claimant must then establish the body corporate failed in that duty of care.

Injury on common property resulting from a failure to conduct appropriate repairs may demonstrate a failure by the body corporate in their duty of care to the injured person dependant on the circumstances. It should be noted there may be defences available to the insurer or body corporate once a claim has been lodged against the body corporate.

Upon lodgement of a claim, the insurer will review the circumstances and may potentially seek further legal advice on the best approach to the claim. The insurer will either defend the claim or seek to settle the matter, depending on the insurers view of what is the most commercial outcome for the insurer and body corporate factoring in expenses (such as defence costs & settlements) and the insurers view on prospects of successfully defending the claim.

Solicitors are the most appropriate professional for an injured party to seek specific advice on in relation to an injury claim.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
T: 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.

This post appears in Strata News #380.

Question: Does Body Corporate Insurance cover voluntary workers? Does it cover the onsite manager if they were to get injured say carrying sandbags which is not in the normal scope of their work?

Answer: Onsite managers are generally contracted to provide services to the body corporate and are therefore not considered volunteers or employees.

Volunteers

Volunteers are generally considered to be persons engaged for work solely on behalf of the body corporate without promise of reward or remuneration (some policies will have an allowance for office bearers that receive payment for their role as an office bearer).

There are three considerations:

1. Voluntary Workers Section (Injury to the volunteer): This section is designed to cover prescribed injuries paying a specific amount for the events listed in the policy (for example disablement, loss of sight)
2. Public Liability (Injury to Volunteer): This section is designed to respond to legal claims in the event the volunteer is injured and sues the body corporate.
3. Public Liability (Volunteer Injures someone or damages property): Strata policies may extend to cover volunteers in the definition of “You” (i.e. insured) for the public liability section and therefore cover volunteers if they are sued for a personal injury or property damage claim resulting from their voluntary work.

Onsite Managers

Onsite managers are generally contracted to provide services to the body corporate and are therefore not considered volunteers or employees.

Working on the presumption the onsite manager is not an employee (under and employment contract) or a volunteer, the only consideration under a strata policy for the onsite manager is Public Liability (i.e. injury to the onsite manager). The public liability section is designed to respond to legal claims in the event the onsite manager is injured and sues the body corporate. In relation to the specific query of carrying sandbags which is not in the normal scope of their work – Legal liability is considered on a case by case scenario looking at all of the circumstances and is determined by legal practitioners after a lengthy examination of facts. The onsite manager would need to demonstrate the body corporate beached their duty of care to the onsite manager and this contributed to the injury.

Onsite managers can insure for personal accident & illness, income protection, life insurance etc to cover instances they are injured while undertaking activities as a contractor for the body corporate and should speak to a financial adviser for these insurances. Other policies an onsite manager should consider are Public Liability, Professional Indemnity, Business Insurance, Management Liability/Employment Liability.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
T: 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.

This post appears in Strata News #358.

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.

Simon Plummer
StrataRatings
E: [email protected]

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.

This post appears in Strata News #223.

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:

1. The death or injury to a person, or
2. 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.

Whitbread Insurance Brokers

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.

If you have a question about public liability and strata insurance for volunteer workers or something to add to the article, leave a comment below.

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