This article considers the strata insurance implications when voluntary work such as a Spring Cleaning Busy Bee is carried out at your scheme. Leonie Milonas, PSC Property Lync Insurance Brokers provides the following information.
Table of Contents:
- QUESTION: Is the owner of a strata apartment permitted to do basic gardening eg weeding and raking leaves, if there is no paid contractor to do these tasks? This work would be voluntary and at their own risk and with no liability accepted.
- QUESTION: We have a lot owner asking to mow for a fee. For insurance purposes, are they classified as a volunteer, carrying out voluntary work, or a worker / contractor? How will this affect our insurance?
Question: Is the owner of a strata apartment permitted to do basic gardening eg weeding and raking leaves, if there is no paid contractor to do these tasks? This work would be voluntary and at their own risk and with no liability accepted.
Answer: It is evident that it is a great cost saving to have willing residents carry out these duties and all is fine until something goes wrong.
Firstly, we need to recognise the importance of having someone doing this task, both now and into the future. It could potentially be a big job and could become a real mess if not attended to properly.
It can be quite common for residents to carry out voluntary tasks on behalf of their strata company. It could be maintenance or renovation inside and outside of the building, or cleaning and gardening of communal areas. It is evident that it is a great cost saving to have willing residents carry out these duties and all is fine until something goes wrong. For example, the person doing the task trips over and breaks his or her ankle. They cannot return to their regular place of work and seek compensation for medical costs or lost income from the strata company.
In a strata insurance policy, the voluntary workers section provides individuals cover for accidental death or injury while working voluntarily as authorised by the strata company without payment, reward, or remuneration. Therefore, if you would like to volunteer on behalf of your strata company to carry out the duties required, you will need to seek written approval from the strata council. It is also important to advise and confirm with your strata manager that the type of voluntary work is officially recorded with your name and date. If you are injured whilst carrying out this work, this information may be requested by the insurer when lodging a claim.
Each insurer has its own table of benefits for this section, detailing the benefit amount payable for each event. This can include loss of sight and/or the loss of hands/feet, etc. In addition to the table of benefits, it is also important to read through and understand the insurer’s policy conditions and exclusions.
Therefore, should the strata company wish to engage a voluntary worker, they should first check whether the work needs to be performed by a licensed tradesperson (e.g., plumbing and/or electrical works) and ensure that the person allocated to the task is qualified and able to take on the work.
So, what are the options? The strata company can permit voluntary workers and take on the risk, or engage a suitably qualified contractor for the service.
This post appears in Strata News #644.
Question: We have a lot owner asking to mow for a fee. For insurance purposes, are they classified as a volunteer, carrying out voluntary work, or a worker / contractor? How will this affect our insurance?
We have a strata of 5 lots. For a few years, one lot owner was mowing the front council verge for a fee of $500 per annum which was reduced from the annual levy notice until it was discovered that our insurer does not cover for any worker or voluntary work outside the boundary of the strata. Consequently, an external lawn mowing contractor with their own liability and workers compensation insurance was hired.
The lot owner who was originally performing the task wants to resume the duties and has been attempting to be reinstated for two years. We now have a new insurer that will insure a worker or voluntary work outside the boundaries of the strata of the council verge forming part of the strata. Before it could be determined what constituted a worker or volunteer so there were no grey areas to what the insurer would accept liability should an incident occur, the lawn mowing contractor was inadvertently cancelled due to a misunderstanding by our newly hired strata manager. It is now up to the Council of owners, which is all lot owners, to have a meeting for a vote as to whether we reinstate the contractor or use the services of the lot owner for a fee.
So is the lot owner a volunteer, carrying out voluntary work, or a worker / contractor. He is not a registered business and will not be issuing invoices, however, he is getting paid for the work.
If the CoO votes to move ahead, would we then be financially responsible should an incident take place? Would the insurer declines the claim because the lot owner didn’t fall under the category of worker or volunteer?
I feel this would put the strata at risk because of the decision of the other lot owners. The few lot owners who do not agree have asked to be absolved from being liable should an incident or damage occur. However, they will not agree to this.
Answer: A volunteer is someone performing unpaid or voluntary work on common property on behalf of the strata company in a voluntary capacity.
Please note: this response was provided prior to the proclamation of the new strata title amendments.
If the Strata Company is paying remuneration of any kind to someone, including a Lot Owner, to undertake paid work they would be required to have Workers Compensation Insurance. Remuneration or a payment for work that you receive does not have to be a weekly salary, as it can include other benefits. Please refer to the WorkCover website as it explains remuneration.
You are required to have workers compensation insurance if you are an employer of any worker/deemed worker under the Workers’ Compensation and Injury Management Act 1981. A strata company is responsible for its workers in regards to occupational health and safety.
Any claim for workers compensation needs to fall under the definition of the Workers Compensation & Injury Management Act 1981 (WC Act) and other legislation that applies, please refer to the Work Cover website. A lot owner may be deemed a worker in respect to Workers Compensation if they are receiving remuneration for whom they are working for i.e. Strata Company.
A volunteer is someone performing unpaid or voluntary work on common property on behalf of the strata company in a voluntary capacity e.g. the Lot Owner was getting no remuneration by way of wage or reduction in rent or levies and gets hurt whilst performing voluntary work. The Lot Owner may be able to claim under the Voluntary Workers, but please note this is Personal Accident type cover with no medical or any other benefits that are usually payable to workers under the WC Act.
These answers relate to Western Australia. When it comes to Workers Compensation, each state of Australia has different legislation for this type of insurance.
It is important that the Strata Company has Voluntary Workers and Workers Compensation insurance whether this is in the same strata insurance policy or a separate insurance policy.
This post appears in Strata News #220.
Have a question about the strata insurance implications when voluntary work is carried out at your scheme or something to add to the article? Leave a comment below.
General Advice Warning
This article has been prepared for informational purposes only, and is not legal advice and should not be relied on as legal or insurance advice. You should consult with a qualified insurance or legal advisor.
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
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This article has been republished with permission from the author and first appeared on the PSC Property Lync Insurance Brokers website.
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