NAT: Q&A Public Liability Insurance in Australia

The LookUpStrata Team

4 years ago

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

Table of Contents:

QUESTION: We exit our complex onto a busy road. If an accident occurs, is the owners corporation liable?

QUESTION: My retired husband has a current electrical license. To save the owners corporation money, he does minor work for free. Does he need public liability insurance?

QUESTION: Our committee has approved the security gate to be propped open by owners in some circumstances. Do we need to disclose this arrangement with the insurer? What happens if someone gets injured?

QUESTION: Around 70% of apartments are holiday let in our NSW resort strata plan. Can we introduce a by-law that requires all leased apartments to have mandatory landlords insurance?

QUESTION: If a lot owner’s dog was responsible for attacking someone on common property, what liability exists for the owners corporation?

QUESTION: A common property light fitting ignited and damaged a resident’s car. Strata Management advised the Strata Committee to “do nothing – admit nothing”. Is this the correct approach?

QUESTION: In a small scheme, what should the Owners Corporation consider regarding liability for contractors working at the property?

QUESTION: If a lot owner mows the council property outside the strata property for free and someone gets injured, can the strata get sued?

QUESTION: How do we know that our QLD insurance policy covers volunteers? If someone receives a small remuneration as a volunteer, are they still covered? What needs to be done to ensure volunteers are covered?

QUESTION: As owners of our building, we are confused about the insurance requirements needed by volunteers who carry out work on our building. What does the owners corporation need to put in place to mitigate the risk of claims from volunteers who might have an accident while working on our building?

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 volunteer 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 in Australia?

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Question: We exit our complex onto a busy road. If an accident occurs, is the owners corporation liable?

We have a potential safety issue when exiting our complex. Our small complex of seven villas exits onto a busy main road. The road’s speed limit is 50 km per hour. Local road rules permit parking on either side of our driveway, making it impossible to see oncoming traffic before being on the roadway. We’ve had one minor accident and many near misses. The committee has written and phoned the local council to see what can be done. Unfortunately, they have not responded. If there was a serious accident, what liability would the owners corporation (OC) have?

Answer: The OC has no liability for anything outside the strata scheme’s property boundary.

Have you ever seen an advertisement where the ‘punch line’ is delivered, however, you remember the disclaimers that follow more than the ‘punch line’.

The answer to your question is like these advertisements.

The punchline

Put very basically, the OC has no liability for anything that happens outside the property boundary of the strata scheme.

The disclaimer/s

Providing the committee have not

arranged some event or

item or

alteration to anything outside the property boundary, for example – when the OC arrange for an off-site AGM, EGM or other function to be held on behalf of or for the benefit of the members of the OC, then the OC can be held liable if they are negligent if something happens that causes injury or harm to anyone (including members). e.g. I have seen examples where the committee arranged a picnic at a local park (a get to know your neighbour function). A child of one of the owners was hit by a cricket ball and the parents attempted to hold the committee responsible for not disallowing the other children to play.

The OC policy had a clause that said:

What we cover

We will pay up to the sum insured shown in the schedule where you become legally responsible to pay compensation for;

Personal injury; or

Property damage; resulting from an occurrence happening in connection with your business.

Including

Hiring out of sporting and recreational facilities

Recreational and other activities, social or other activities arranged for and on behalf of lot owners and occupiers of lots.

In this case, the committee were defended, and the claim was denied.

Most strata insurers offer a broad form liability cover which will respond if the OC is being held liable for (or, more correctly put, someone is attempting to hold the OC liable for) injury or harm. You should check this with your insurer.

Scott Driscoll Driscoll Strata Consulting E: scott@driscollstrataconsulting.com.au P: 0409 632 003

This post appears in the November 2024 edition of The NSW Strata Magazine.

Question: My retired husband has a current electrical license. To save the owners corporation money, he does minor work for free. Does he need public liability insurance?

We live in an 18 unit apartment block. My retired husband has a current electrical license. He has been doing minor work around the apartment to save the owners corporation money. He has cover for injury as a voluntary worker under the strata insurance. We have been told that his business public liability insurance does not cover him because he volunteers. Does he need public liability insurance?

Answer: This question will depend entirely on whether the person carrying out the work is a volunteer.

The answer will depend entirely on whether the person carrying out the work is a volunteer.

In the context of strata insurance policies, a volunteer is typically defined as an individual who engages in work or duties for the owners corporation without any expectation of reward or remuneration. For such volunteers, most strata policies provide a specific scope of coverage. This usually means that the term “you” in the policy (referring to the insured party) is extended to include these voluntary workers for both the public liability and voluntary workers section of a strata policy.

Consequently, most strata policies will extend to cover public liability for any legal liabilities arising from damage or injury caused by the volunteers during their work.

Furthermore, the voluntary workers’ section of these policies is also designed to cover any injuries the volunteers might sustain while performing their duties.

On the other hand, the situation changes if the individual performing the work receives any form of payment or remuneration. In such cases, they should have public liability insurance. Additionally, they should consider an insurance policy covering any personal injuries they might suffer while working.

It’s crucial to note that insurance policies vary between insurers. Therefore, I strongly recommend consulting with your insurance broker to understand the specific details and extent of coverage provided in each case.

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.

Question: Our committee has approved the security gate to be propped open by owners in some circumstances. Do we need to disclose this arrangement with the insurer? What happens if someone gets injured?

In our Queensland body corporate building, we have a by-law stating that our security access gates cannot be propped open unless the body corporate provides written approval. However, the committee has approved a few owners to prop open the gates for visiting tennis players while they are playing tennis.

Is the committee in violation of the code of conduct by providing this approval? Shouldn’t committee decisions be in the best interest of the body corporate?

What are, if any, the insurance implications for both the body corporate and individual owners should a claim for loss and personal injury be able to be linked to the gate being propped open with approval?

Does the body corporate have a duty of disclosure to the insurer that such approval has been given?

Answer: Every action on common property has some element of risk.

A body corporate cannot risk manage every conceivable risk. Every action on common property has some element of risk such as someone driving a vehicle on common property. There are two considerations to this question:

Duty of Disclosure: The insured (body corporate) has a legal duty to disclose all relevant information that might influence the insurer’s decision to accept or decline the risk or to set the premium and terms of coverage. The duty of disclosure applies both before the policy is issued and upon renewal. Insurers do not need to be informed of every action a body corporate takes on common property. It is our view that this example is not something that would warrant disclosure to the insurer.

Legal Liability: Legal liability claims are considered on a case-by-case scenario by insurers, solicitors and judges (if the claim ends up in court). Claims are never black and white, and legal liability will vary based on the circumstances. If there is an injury on common property, there is always a risk of the body corporate being named in a claim. Where there is reasonable concern of a foreseeable event that may lead to injury, the body corporate should take action to prevent claims. We question whether this example passes this threshold.

Strata Insurance includes public liability cover designed to provide cover for the body corporate being drawn into a claim for personal injury or property damage.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

Question: Around 70% of apartments are holiday let in our NSW resort strata plan. Can we introduce a by-law that requires all leased apartments to have mandatory landlords insurance?

In our resort strata plan, around 70% of apartments are holiday let. It is difficult to confirm if owners hold a current landlords insurance policy. Should the owners corporation be indemnified?

Our secretary suggested we introduce a by-law that requires all leased apartments to have mandatory landlords insurance. Is this the best way to indemnify the owners corporation from third party liability claims for accidents inside the apartment? All leased apartments are maintained to a high standard by owners corporation, and owners.

We note lawyers cast the net wide in any personal injury claim, and we wish to ensure the owners corporation has no exposure as a second respondent in any claim. The owners corporation carries $60m public liability insurance for incidents occurring on common property.

Answer: I do not believe the owners corporation has the jurisdiction to mandate that lot owners must take out a certain type of insurance.

I do not believe the owners corporation has the jurisdiction to mandate that lot owners must take out a certain type of insurance. That is entirely the lot owner’s decision.

Mandating owners to hold current landlords insurance will not remove the owners corporation’s exposure if they become a respondent to a personal injury claim.

If the owners corporation is named as a respondent, they will need to respond to the claim regardless of whether the individual lot owner has landlords insurance.

Legal liability claims are considered on a case-by-case scenario by insurers, solicitors and judges (if the claim ends up in court). Claims are never black and white. Legal liability will vary based on the circumstances. Solicitors may cast the net wide and name various parties, including lot owners and the owners corporation.

The purpose of legal liability for a strata policy is to ensure the owners corporation has cover should they be named in a claim for personal injury or property damage.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in Strata News #673.

Question: If a lot owner’s dog was responsible for attacking someone on common property, what liability exists for the owners corporation?

Answer: Although not the owner of the pet itself, strata properties can be drawn into a claim that results from the actions of other’s pets.

Legal Liability claims are considered on a case-by-case scenario by insurers, solicitors and judges (if the claim ends up in court). Claims are never black and white and legal liability will vary based on the circumstances.

While the likely respondent in a claim for a dog attack will be the owner of the dog, an owners corporation needs to consider not just liability but also other financial exposures.

For personal injury claims, solicitors like to cast the net wide and include as many respondents to a claim as possible. In doing so, the Owners Corporation may be brought into a claim for a dog attack that they ultimately defend but incur legal costs in doing so or that they feel liability does not exist but make a commercial settlement of some sort to avoid legal expenses.

We have been alerted to a policy exclusion for pets in common areas affecting our clients insured with a few of the major insurers. An example of this exclusion is:

We will not pay for any claim:… in respect of:

injury to or death of animals on Your Common Area;

Personal Injury or Property Damage caused by animals on Your Common Area other than guard or watch dogs You employ for security purposes.

In summary, the exclusion means the policy does not cover injury to or death of animals on your common area, or personal injury or property damage caused by animals on your common area.

Having reviewed the exclusions, Strata Insurance Solutions are of the view that if the owners corporation is sued for injury or property damage as a result of pets in common area (such as a dog attack), the public liability does not respond.

Many strata properties are becoming pet friendly and legislation is also now making it hard for strata properties to outright reject pet applications. Although not the owner of the pet itself, strata properties can be drawn into a claim that results from the actions of other’s pets.

In addition to animal attacks, below are three example scenarios we have considered that concern us with regard to the policy exclusions:

Scenario 1 – A cat falls off a balcony and injures/kills someone on common property;

Scenario 2 – A dog pees/poos on the common area floor and a person slips on it breaking their ankle;

Scenario 3 – Sensors in a lift fail and cause the lift to close with the owner on one side of the lift and the dog on the other side of the lift with a leash held by the owner. When the lift goes up, the dog gets choked/decapitated. The owner sues for the death of the dog and mental trauma after witnessing the incident.

If you have specific concerns about cover for pets in common areas, actions available can include:

If your building has an application process to allow pets, placing a requirement on the pet owner that they must indemnify the body corporate/owners corporation for any liability caused by their pet while on common areas of the building;

Requesting the insurer remove exclusions (this is unlikely as insurers have the exclusion as a standard clause in their policy wording);

Moving the policy to a more “pet friendly” insurer;

Setting up a separate public liability policy that does not have an exclusion for animals on common property (not suitable for smaller strata buildings with less than say 25 lots).

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in Strata News #623.

Question: A common property light fitting ignited and damaged a resident’s car. Strata Management advised the Strata Committee to “do nothing – admit nothing”. Is this the correct approach?

A light fitting in our common property garage ignited, melted and dripped down onto a resident’s car, causing damage to the vehicle. The resident was parked in an authorised parking space below. Strata Management’s advice to the Strata Committee was “do nothing – admit nothing” to the resident.

The resident has not been advised of damage. The damage was discovered by the Strata Committee member.

I am unhappy with the advice from Strata Management from a legal, moral and ethical position.

Common Property garage, authorised Resident, in Authorised parking space, light fitting catches fire spontaneously – surely the OC is responsible for the damages?

Answer: The approach of “do nothing – admit nothing” can make the claim process very unpleasant for both the vehicle owner, committee and owners corporation.

Strata insurance policies provide cover for Public Liability (sometimes referred to as Legal Liability) covering claims you become legally liable for personal injury and property damage.

Generally speaking, strata insurance policies will require that you:

Do not admit liability; and

Notify the insurer immediately of a claim.

If you breach the above conditions, the insurer is able to reduce their liability to the extent of any prejudice caused by your failure to comply with the policy conditions.

If the insurer was always going to accept liability irrespective of the admission, then it would be difficult for them to deny cover or reduce liability in the claim. However, there may be some instances where another party is at fault (such as the installer of the light), so we always recommend you refer claims to the insurer before making any admissions.

Insurers like to be notified early of claims for public liability as early contact with the aggrieved party can sometime reduce their desire to take a litigious approach to the claim (particularly in instances of injury claims).

Understanding the policy condition of not making an admission of liability and notifying the insurer of the claim, proactive actions can still be taken by the Owners Corporation which include:

Notifying the owner of the damage.

Lodging a public liability claim under their strata insurance policy and advising the owner of the same.

Asking the owner to provide quotes for damage to allow the insurer to assess the claim.

If you feel the Owners Corporation are responsible for the damage, this can be conveyed to the insurer – but allow the insurer to confirm liability before conveying such message to the vehicle owner.

The approach of “do nothing – admit nothing” can make the claim process very unpleasant for both the vehicle owner, committee and owners corporation – this approach is not recommended.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in Strata News #621.

Question: In a small scheme, what should the Owners Corporation consider regarding liability for contractors working at the property?

We are a small 3 lot strata in NSW. We are concerned about accident and injury for contractors plus any liability arising for the Owners Corporation. We have contractors and their employees who conduct maintenance on our complex such as cleaning gutters on the two-storey building.

Aside from the duty of care we may have about a safe workplace, what are our and the contractor’s obligations for insurance coverage? Should they have accident/personal injury cover as well as public liability cover?

Answer: Legal liability is considered on a case by case scenario looking at all the circumstances and is determined by legal practitioners after a lengthy examination of facts.

For sub-contractors (that are not employees or volunteers of the owners corporation), the only consideration under a strata policy is Public Liability (i.e. injury to the onsite manager). The public liability section is designed to respond to legal claims in the event a contractor is injured and sues the owners corporation.

Legal liability is considered on a case by case scenario looking at all the circumstances and is determined by legal practitioners after a lengthy examination of facts. The contractor and their solicitors would need to demonstrate the owners corporation has beached their duty of care to them and this contributed to the injury or they are otherwise legally liable for to compensate the contractor for the injury.

Not all injury claims result in successful claims against other parties including the owners corporation – for example if the contractor’s own actions were the contributing factor to the injury, they can’t sue themselves.

In such instances, contractors can insure for personal accident and illness, income protection, life insurance etc and should speak to a financial adviser for advice regarding these insurances. The responsibility for arranging these policies are a matter for the contractor and not the owners corporation to arrange.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in Strata News #612.

Question: If a lot owner mows the council property outside the strata property for free and someone gets injured, can the strata get sued?

Answer: The injured person would have to demonstrate the owners corporation were negligent or otherwise legally responsible for the injury.

Liability claims are considered on a case by case scenario by insurers, solicitors and judges (if the claim ends up in court). Claims are never black and white and legal liability will vary based on the circumstances.

While Strata Insurance Solutions does not give advice on legal issues, the injured person would have to demonstrate the owners corporation were negligent or otherwise legally responsible for the injury. In the instance where the owners corporation are not responsible for the mowing and the injury does not happen as a result of their ownership of common property, I would find it difficult for the owners corporation to be held legally responsible.

The person conducting the mowing, however, may have a greater exposure to liabilities.

The owners corporation should have public liability insurance which is designed to cover legal liability claims that may arise from such instances and likewise the person doing the mowing may want to check with their contents insurer as to whether the public liability section under the contents policy would extend to provide cover.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in the August 2022 edition of The NSW Strata Magazine.

Question: How do we know that our QLD insurance policy covers volunteers? If someone receives a small remuneration as a volunteer, are they still covered? What needs to be done to ensure volunteers are covered?

Answer: Generally, “Volunteers” are only ever people who are engaged in work on behalf of the body corporate without promise of reward or remuneration.

You should seek specific advice in relation to your insurance policy as no policies are ever the same.

Generally, “Volunteers” are only ever people who are engaged in work on behalf of the body corporate without promise of reward or remuneration.

If they do receive payment they are no longer a volunteer and the only cover that can be considered is point 2 above “Public Liability (Injury to Volunteer)” on the proviso they are not an employee (which is covered by workers comp).

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in the November 2021 edition of The QLD Strata Magazine.

Question: As owners of our building, we are confused about the insurance requirements needed by volunteers who carry out work on our building. What does the owners corporation need to put in place to mitigate the risk of claims from volunteers who might have an accident while working on our building?

As owners of our building, we are confused about the insurance requirements needed by volunteers who carry out work on our building. What does the owners corporation need to put in place to mitigate the risk of claims from volunteers who might have an accident while working on our building?

I would like help with the following questions please:

Question 1: Does the volunteer need a personal accident insurance policy for working in the building?

Question 2: Our building insurance policy covers volunteers for $300k. Is that enough?

Question 3: Who is a volunteer? If a person was a volunteer but ended up claiming small amounts of money from the owner’s corporation to do some little jobs, are they still considered a volunteer?

Question 4: Who needs workers compensation?

Question 5: If an owners corporation is unaware of ongoing or potential sickness, how do they avoid being liable if an accident occurred when an unfit person was carrying out work on a building?

Answer: For volunteers, there are three considerations when it comes to owners corporations and public liability insurance

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).

For volunteers, there are three considerations:

Voluntary Workers (personal accident) 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)

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.

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.

To answer the question specifically:

Answer 1: No, Voluntary workers cover is not required. It is good to have the cover to protect volunteers because it is event based and therefore does not require the volunteer to demonstrate the owners corporation were negligent (as is the requirement for public liability claims).

Answer 2: $250,000 to $300,000 is cover that is offered standard in the industry and our company I have not recommended that owners corporations consider higher levels of cover for voluntary workers cover. In addition to this the body corporate will be required to have a minimum of $20,000,000 cover for public liability should the volunteer decide to take legal action against the owners corporation for their personal injury.

Answer 3: The voluntary workers cover in a strata policy is limited to persons engaged for work solely on behalf of the body corporate without promise of reward or remuneration. In such cases people being paid a small amount of money are no longer considered a volunteer and does not have access to the cover under public liability or voluntary workers cover of the policy. You can purchase personal accident and illness policies for persons not deemed volunteers and likewise it is recommended public liability insurance is purchased by the paid person to protect their interests should they become liable for injury or property damage.

Answer 4: Generally, persons employed under an employment contract need workers compensation cover. More information on workers compensation requirements can be found on Icare: Who Needs A Policy

Answer 5: It is impossible to completely avoid liability and that is why you have insurance. Taking reasonable risk management practices such as arranging an occupational health and safety report is on such risk management practice.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This post appears in the June 2021 edition of The NSW Strata Magazine.

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: rsmith@thestratacollective.com.au 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: rsmith@thestratacollective.com.au T: 1300 554 165

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

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 depending 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: tshandiman@iaa.net.au T: 1300 554 165

This post appears in Strata News #380.

Question: Does Body Corporate Insurance cover volunteer 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.

Volunteer Workers

There are three considerations:

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)

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.

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 an 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: tshandiman@iaa.net.au T: 1300 554 165

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: simon.plummer@strataratings.com.au

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 in Australia?

What does public liability insurance include in Australia?

Who pays the excess when a claim is made under public liability insurance in an Australian 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.

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.

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 in Australia 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.

For more Strata Insurance and risk advice please contact: Lia De Sousa Whitbread Insurance Brokers

This post appears in Strata News #130.

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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