Under your Residential Strata package policy there are several “optional” extensions that you can elect to take out. These optional extensions are not part of the standard cover offered by your insurer, however can be included on your policy. An additional premium, excess and special conditions usually apply if you request to have these options on your policy. So what are they? As with all policies, each insurance company will have a slightly different level of cover, premium and conditions however we have put together a general overview of what each extension covers so as to give you a better understanding:

  • Flood Cover
  • Office Bearer’s Liability
  • Catastrophe Cover
  • Voluntary Workers Cover
  • Fidelity Guarantee
  • Increasing Legal Liability Sum Insured

Flood Cover

Yes it is still under a bit of contention and review at the present moment and each insurance company will have a different wording for what their definition of flood cover is. Whichever way they define it, essentially flood cover will provide cover for your Building and Common Contents caused by flood occurring in the period of insurance. In order to request this extension it may be necessary to provide the insurance company with flood maps of the area, these are typically obtained from your local council department and any cost incurred will be at your own expense. You may also need to complete a questionnaire about your property advising how close you are to a river, dam, creek and so on as well as when the last known flooding of those occurred. Once all the relevant information has been provided it is up to the insurance company to decide if you are eligible for this extension and if so, what additional premium and excess will apply to this cover option.

Office Bearer’s Liability

Due to the decision-making responsibility of committee members, their role may be viewed as similar to the role of a company director as far as the legal exposure of that position is concerned. Failure to act in good faith and exercise due care and diligence in carrying out their duties and failure to act in the best interest of the owner’s corporation/body corporate may result in civil penalties for breaches under common law. The committee members must be aware of their responsibilities under common law and statute.

The Office Bearer’s Liability extension provides committee members of an owner’s corporation/body corporate with financial protection in the event that they become legally liable to pay compensation for actual or alleged wrongful acts.

An additional premium and excess will apply to this cover option. Also, you will need to make sure you check the exclusions on this extension to ensure that you know exactly what you are covered for.

Catastrophe Cover

The “supply and demand” of both building materials and labour after a catastrophic event has been estimated that increases in replacement costs, on average, between 30-35%. Catastrophe insurance provides protection for the Body Corporate and ultimately you as an individual investor, against this sudden escalation in rebuilding and relocation costs and the shortfalls in indemnity periods associated with declared catastrophic events.

In the event of your property being lost or damaged as a result of a ‘government-declared’ catastrophe or emergency, the insurer will increase the sum insured for your property (and depending on the insurer they will also increase the additional benefits) up to an amount specified in the schedule.

Voluntary Workers Cover

This section provides cover in the event that a “voluntary” worker is injured or dies as a result of an accident while carrying out the voluntary work for the body corporate in the building or on the common property. A voluntary worker is any person who does work without receiving or expecting to receive any fee or reward. If you select this extension, you will need to be aware of the specific exclusions and conditions that apply to this section.

Fidelity Guarantee

This section aims to protect the body corporate “funds” against the fraudulent embezzlement or fraudulent misappropriation of funds set aside for the purpose of management of the body corporate/company affairs by a committee member.

Increasing Legal Liability Sum Insured

In the day and age of litigation it is worth considering a higher legal liability sum insured. Gone are the days when $1,000,000 and $2,000,000 were sufficient. Now days more and more are opting for a higher limit. Is your limit high enough? For a quote to increase the legal liability on your policy, call one of our team today on (07) 4040 4444 or 1800 937 111.