This article discusses what insurance a body corporate caretaker should have in QLD and who pays if they cause damage during their work.
Question: What insurance should a contracted caretaker hold in Queensland, and who pays if they cause any damage during their work?
We have a contracted caretaker in our Queensland scheme. The caretaking contract does not specify which insurance the caretaker must hold.
The caretaker provides landscaping, handyman services, cleaning, and oversight of hired trades. What insurance should the caretaker hold?
If the caretaker or their trades damage common property while carrying out contracted work, who is responsible for the cost of repairs?
Answer: While the contract may not require it, it is quite common for caretakers to hold their own public liability insurance as part of their business operations.
In Queensland, it is common practice for a caretaker or letting agent engaged by a body corporate to hold appropriate insurance, particularly where their duties include landscaping, handyman services, cleaning, and coordinating or supervising trades. While the caretaking agreement typically sets out the insurance requirements, the absence of an insurance clause does not remove the caretaker’s legal responsibility for damage or negligence arising from their work.
As a matter of prudent business practice, a caretaker undertaking the types of activities you describe would ordinarily be expected to hold Public Liability Insurance. This insurance covers claims for property damage or personal injury caused to third parties (including the body corporate or lot owners) arising from the caretaker’s activities. Depending on how their business is structured and whether they employ staff, they may also require Workers’ Compensation Insurance and, where they provide advisory or supervisory services, potentially Professional Indemnity Insurance.
If damage occurs to common property while the caretaker is carrying out their contractual duties and the damage is the result of negligence or improper work, the caretaker would generally be responsible for the cost of rectification. Insurance does not shift the liability — it simply provides a financial mechanism to cover the caretaker’s exposure if a claim arises.
Even where a contract does not expressly require insurance, the caretaker may still hold their own policy as part of their business operations. This is strongly recommended because the potential cost of a serious claim (for example, significant property damage or a personal injury incident) can be substantial. Insurance ensures that if something does go wrong, there is a financial resource available to respond to the claim.
Without insurance, the body corporate or an affected individual could still pursue the caretaker directly for damages. However, if the caretaker lacks the financial capacity to meet a claim, recovering compensation can become difficult. For this reason, insurance clauses are commonly included in caretaking agreements to provide an additional layer of protection for the body corporate, lot owners, and the caretaker themselves.
Ultimately, the absence of an insurance clause in the caretaker agreement does not remove the caretaker’s responsibility if their actions cause damage to property or injury to a person. Insurance simply provides a mechanism to fund that liability. While the contract may not require it, it is quite common for caretakers to hold their own public liability insurance as part of their business operations. If they do not hold insurance, any liability for damage or injury arising from their work would generally remain their personal responsibility and must be met directly by them.
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.
This post appears in Strata News #783.
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