Responsibilities of the owners corporation - Insurances

Building insurance

The owners corporation must insure the building under a damage policy with an approved insurer. This does not apply to an owners corporation for a strata scheme comprising two lots if the owners corporation decides by unanimous resolution, and the buildings in one lot are physically detached from the buildings in the other lot, and no other building in the scheme is on common property.

Approved insurers are those authorised by the Australian Prudential Regulation Authority for general insurance.

A damage policy must cover the building for:

• replacement (where destroyed) or the reinstatement (where damaged) of the building back to the same condition it was in when new, and
• payment for removal of debris and the payment of architects and others whose services are needed for the replacement or reinstatement.

The building includes owners’ fixtures and fittings. Fixtures and fittings are items like carpets in common areas, hot water systems, light fittings, toilet bowls, sinks, shower screens, cupboards, internal doors, stoves, common air conditioning systems and intercom systems.

The building must be valued every five years and insured for at least that value.

Public liability insurance

The owners corporation must insure, with an approved insurer, against damage to property, death or injury for which the owners corporation could become responsible. The minimum amount of cover is $10 million.

Workers compensation insurance

The owners corporation must have workers compensation insurance, with an approved insurer, where it is required under the Workers Compensation Act 1987.

Voluntary workers insurance

The owners corporation must insure, with an approved insurer, against any damage that it may become liable for when a person does voluntary work for the owners corporation in the building or on the common property.

A voluntary worker is any person who does work without any fee or reward, or without expecting any fee or reward.