Do we need office bearer insurance? | Strata Committees | Flat Chat Forum: Your Questions Answered




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Do we need office bearer insurance?
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gwyn
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19/08/2017 - 3:53 pm
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We are a small complex of 7 villas.  We have five resident/owners on the SC.  We are looking at renewing our insurance but are considering taking out some cover under the Office Bearers Legal Liability policy which we have never had .  

First question: please give a ballpark of what sort of premium cost this might be. (I can't get an answer from the insurer or the Strata Manager)

Second Question: do you recommend including this cover?

The five committee members have agreed to include the cover by informal discussion, but the Strata Manager reckons we need an Extraordinary Meeting of the Owners Corp (which means the other two owners included) who are not residents.  The Strata Manager quotes us $330 to hold the meeting.  

Third question:  is this matter insignificant enough that the committee members can agree without the cost etc of a formal meeting being called?

Thank you

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Boronia
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20/08/2017 - 9:29 am
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The policy for our SP includes $100K of Office Bearers' Liability, but it just part of a bundled policy covering everything, so it is not possible to determine individual proportions of the premium. I imagine most policies are like this.

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Puddn
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20/08/2017 - 12:21 pm
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Like Boronia, our building insurance policy includes office bearer liability. No need for separate insurance.

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gwyn
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20/08/2017 - 5:18 pm
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Boronia said
The policy for our SP includes $100K of Office Bearers' Liability, but it just part of a bundled policy covering everything, so it is not possible to determine individual proportions of the premium. I imagine most policies are like this.  

Thank you.  Just wondering how much extra to pay to include it with the other things covered in the policy which has building insurance cover of $5.8m for a premium of $6000.

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JimmyT
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20/08/2017 - 5:30 pm
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Every building is different - as is every insurance policy.  Shop around (and have a look at CHU, our sponsors).

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gwyn
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21/08/2017 - 9:25 am
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Thanks Jimmy T and you'll be pleased to know that CHU is our current insurer.   I rang CHU to ask how much extra to add the Office Bearer into our existing policy and they wouldn't give me a figure.  They said the request had to come from the Strata Manager.  How bureaucratic can you get, and why?

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JimmyT
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21/08/2017 - 11:31 am
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I have to admit I am a bit confused by this question.

Most strata insurance has a built-in insurance for the strata committee and office bearers.

Many exclude possible areas of legal issues, such as defamation.  Strata law allows for committee members acting in good faith to make mistakes without being unduly penalised.

So, I have to ask, what is it that your office-bearers (Chair, secretary and treasurer) are planning to do that would require additional insurance? 

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gwyn
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21/08/2017 - 1:55 pm
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The CHU policy that this strata complex has had for several years has 10 policies within it that you can choose to take some, or all.  Previous committees have chosen not to include the Office Bearer liability (nor included certain other policies like Machinery Breakdown, or Catastrophe) .   There is no new reason to take out Office Bearer, it just seems sensible like taking out Public Liability or Fidelity Guarantee.  I would presume the premium would be fairly nominal, I hope.

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Sir Humphrey
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21/08/2017 - 2:11 pm
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gwyn said
We are a small complex of 7 villas.  We have five resident/owners on the SC.  We are looking at renewing our insurance but are considering taking out some cover under the Office Bearers Legal Liability policy which we have never had .  

First question: please give a ballpark of what sort of premium cost this might be. (I can't get an answer from the insurer or the Strata Manager)

We have it but it has always been part of a bundle in the general strata insurance policy. 

Second Question: do you recommend including this cover?

The five committee members have agreed to include the cover by informal discussion, but the Strata Manager reckons we need an Extraordinary Meeting of the Owners Corp (which means the other two owners included) who are not residents.  The Strata Manager quotes us $330 to hold the meeting.  

I doubt it would cost much. In spite of having similar confusion to that expressed by JT above, I would include it since it is typically part of a comprehensive strata insurance policy. 

With only 7 units, if you have to have a general meeting, why not just call a meeting yourselves? Ask the strata manager to mail the notice to the two non-residents. Surely you can have the meeting on-site in someone's living room. The two non-residents could attend or send an absentee vote or proxy or just not bother to take part.

Third question:  is this matter insignificant enough that the committee members can agree without the cost etc of a formal meeting being called?

As for whether you need a general meeting to approve the expenditure: I presume you have a budget agreed by resolution of the last AGM. If an insurance policy including this cover would not be very different from the amount budgeted for strata insurance, then I think you can go ahead. What was the form of the resolution on insurance at the AGM? If it was that the SC renews insurance when in falls due with the amount in line with a valuation of the property or the insurer's recommendation for increase since the last valuation or something like that, then it is probably OK for the committee to decide to renew with a general strata insurance that includes this cover. 

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Sir Humphrey
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21/08/2017 - 3:03 pm
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BTW. If it turns out the office bearers get this insurance and are then found liable for having exceeded their powers in getting the insurance for the OC, then at least they are covered by the insurance! ;0)

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BONNIE L
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21/08/2017 - 5:53 pm
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BTW also, and am with Sir Humphrey on the blanket cover seems way to go. It's protection for all the office bearers in case of any challenges arising 🙂  

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