Is flood insurance mandatory for bodies corporate in Queensland?

Last week’s LookUpStrata webinar examined whether flood insurance is mandatory for bodies corporate in Queensland. The session featured Will Marquand from Tower Body Corporate, Todd Garsden from Mahoneys, and Tyrone Shandiman from Strata Insurance Solutions. Together, they unpacked the legal, practical and financial implications of flood cover, offering insights into how bodies corporate can navigate risk, regulation and owner expectations.

1. Is flood insurance mandatory for bodies corporate? Legislative context & the Commissioner’s position

Building on the Issue 50, June 2025 Common Ground newsletter from the BCCM, the Commissioner’s guidance states that bodies corporate must be insured for water damage, which may include floods. So, is flood insurance mandatory for bodies corporate in Queensland? If flood cover is not present, it needs to be explicitly added. Owners may request inclusion and the committee must consider it; if denied, a motion can be taken to the next general meeting.

However, this wording leaves ambiguity. Many interpret it as optional rather than mandatory, which is frustrating for stakeholders seeking clarity.

2. Presenters views: Tightening the interpretation

Todd Garsden from Mahoneys: Legislation requires insurance for water damage which largely includes flood. Adjudicators have contested this, but some recent rulings state that if a building is in a known flood-risk zone and flood cover is available, it would be unreasonable not to have it.

Tyrone Shandiman, Strata Insurance Solutions: Insurers vary: some don’t offer flood cover at all; others make it optional; some include it automatically in low-risk zones. High-risk properties are often excluded or face steep premiums.

Will Marquand from Tower Body Corporate: From a strict legal perspective, flood should be treated as water damage and thus be mandatory when risk is identified and cover is obtainable. When it's unavailable, adjudicator exceptions may apply, but committees bear liability for costs if uninsured flood damage occurs.

3. Insurance risks when flood cover is absent

If flood cover is omitted and flood occurs, the body corporate could face liability for repair costs that exceed what insurance would have paid. Owners might pursue legal claims against committee members for failing statutory duties. Some policies include exclusions for failure to maintain insurance, putting office bearers at financial risk.

While office-bearers and public liability insurance may respond, cover depends on whether the legal cause relates to the ownership or management of common property.

4. Practical scenarios and advice

During the webinar, presenters explored real-world examples. For high-rise or hilltop buildings with no flood history, committees may reasonably omit flood cover if risk is truly negligible and cost is material. For buildings near flood zones, panellists recommend strong consideration of flood insurance, even at a higher premium.

The key message: always request insurance quotes with and without flood cover, assess the risk, and document the rationale behind decisions.

5. Record-keeping and documentation

Committees should maintain clear records, including:

• Flood mapping and hydrology reports
• Insurance quotes with and without flood cover
• Meeting minutes that explain the decision-making process
• Committee notes or motions from owners regarding cover

Summary table: Key issues for bodies corporate

Actionable steps for all stakeholders

For committees and strata managers

Review flood risk using mapping tools and past records. Seek insurance quotes both with and without flood cover and compare pricing. Ensure decisions are minuted in detail. If the issue is contentious, take it to a general meeting and allow owners to vote. Escalate unresolved disputes to the Commissioner for adjudication.

For lot owners

If you believe your scheme should have flood insurance, raise it with the committee. If ignored, submit a motion to the general meeting. If still unresolved, pursue adjudication through the Commissioner’s office. Document your position clearly.

For industry professionals

Support clients in evaluating flood risk and interpreting their legal obligations. Highlight the consequences of underinsurance and encourage thorough documentation of all decisions. Promote transparency, especially where flood exposure is a realistic concern.

Final thoughts

The webinar revealed that the flood insurance obligation under Queensland strata law remains complex. The Commissioner’s language leaves room for interpretation, but recent adjudications suggest flood insurance is required where there is risk and where policies are available. Until clearer legislative direction is given, the best protection for committees and owners is transparency, documentation and well-reasoned decisions.

In high-risk areas, the price of coverage is often justified when weighed against the financial and legal consequences of being uninsured. Even in low-risk zones, flood cover may be worth securing if the cost is modest. In all cases, schemes should take reasonable steps to protect their assets and act in the best interests of all lot owners.