"STOP!  Whatever you do, don't get caught out by failing to take out the right insurances.  There are several types of insurance required.  Here is a short list but make sure you check your requirements with an insurance company or broker that specialises in strata insurance."

Building
The Owners Corporation has a duty to cover any building(s) in the strata scheme under a damage policy with an approved insurer.  For details of what's included in the definition "building" refer to the NSW Strata Schemes Management Act 1996 - Section 81.

2-lot schemes
This requirement does not apply to 2-lot schemes where the buildings are detached and no building or part of the building in the strata scheme is situated outside those lots.  Also, the 2 owners must decide, by unanimous resolution, that the Owners Corporation will not effect insurance.

Sum Insured
In the NSW Strata Schemes Management Act 1996 there's a prescribed calculation of the sum insured.  The amount is calculated by adding the estimated cost of:

• Replacement of the building
• Removal of all debris
• Professional fees (ie architect, engineer, etc)

Important:
A valuation of the building must be carried out at least once every 5 years and the building insured for that new valuation amount.  This valuation must be carried out by a qualified valuer or quantity surveyor.

Insurance types

Public Liability
The Owners Corporation is required to insure against death or injury to a person or damage to property for which the Owners Corporation could be held responsible.  The minimum cover is $10,000,000.

Note - Public liability insurance should also be considered by individual lot owners for any occurrence involving their lot which is not covered by Owners Corporation insurance.

Workers Compensation
Where NSW Workers Compensation legislation requires the Owners Corporation to take out workers compensation insurance, this must be effected.  Specific information should be obtained from either NSW Workcover or an insurance broker.

Voluntary Workers Insurance
The Owners Corporation is required to insure against any damages it could be held responsible for in the case of a person acting on behalf of the Owners Corporation on a voluntary basis (not receiving any reward or fee or expecting to receive this).

Misappropriation
The Owners Corporation has a choice whether to take out insurance against misappropriation of money or property of the Owners Corporation.

Other Insurances
Owners should carefully consider taking out contents insurance to cover fixtures and fittings (ie stove, wallpaper, curtains, etc) in the event of damage by water or fire.

The mortgagee of a lot may require the owner to take out specific mortgagee insurance cover as part of the loan.

TIP - For strata insurance, it's always best to contact a company that specialises in strata insurances.

ANOTHER TIP - Not having the correct insurances or enough cover can prove to be an extremely costly exercise IF anything just happens to go wrong.  It's much better to be safe rather than sorry.

EXTERNAL SOURCES:  The owners of this website do not make any warranty or representations regarding the information, products, services or qualifications of any external sources listed on this website.  Readers should make their own appropriate enquiries regarding accuracy, qualifications, licences, etc.  The owners of this website will not be responsible or liable in any way for any representations made by any external sources listed on this website.

IMPORTANT NOTE:  This website deals with strata matters in NSW, Australia only.  Legislation varies in different states and territories and in other countries.  For information pertaining to places outside of NSW, Australia please refer to the appropriate legislation for your region.

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