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  • #11592

    Our Owners Corporation needs to know if insurance laws and requirements for strata title properties have changed. At our recent AGM an Insurance Certificate of Currency was presented by the Strata Manager (SM).

    We noted that Workers Compensation (WC) cover was “not selected” and we asked the SM why. A few owners said they felt it was extremely unusual not to have WC cover as in previous years the previous SM always  included WC insurance cover. 

    I agreed with them because I have owned and sold 3 strata units and each of my previous Owners Corporations have always been covered for WC insurance. The SM replied that he always relies on the advice of the insurance company.

    Owners were very surprised by this statement because advice on insurance matters is usually obtained from either an insurance broker or a solicitor. Insurance companies usually act in their own interests, don’t they?

    After owners left the building we discussed the matter briefly and it was suggested that perhaps our OC has been refused WC cover. However we have not been advised of any claims made on our WC policy.

    Surely every SM has an obligation to notify owners of all insurance claims made. One reason is that any witnesses to an accident could then give evidence. Another reason is so that owners can authorise the SM to seek WC cover from another insurer if our existing one has refused us cover.

    We feel this matter is urgent and your advice would be very much appreciated because our SM is not helpful in the slightest.

Viewing 13 replies - 1 through 13 (of 13 total)
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  • #29252
    scotlandx
    Strataguru

    Does the OC employ anyone? If they don’t, then WCI is not needed.

    Note that employment is employment, where the person is an employee, paid a salary/wages, superannuation.

    #29254
    Cosmo
    Flatchatter

    I am pretty sure that you don’t need WC insurance as long as you don’t exceed payments to a workers over a certain amount in a year. 

    One of the stratas I belonged to had WC, we hardly ever hired anyone.  When we researched it because we didn’t pay over $7,500 (I think but that was a while ago) in wages in a year we didn’t need it.

    I am happy to be corrected on current position as the above was years ago.

    #29255
    SaltyOne
    Flatchatter

    WC Insurance is strongly recommended.  Coverage for an organisation that does not employ anyone is nominal – less than $100 pa from memory.

    The problem is that you can employ people and not know it!   If you engage a contractor, and that contractor is not self-employed, and if the managing agent fails to get a subcontractor’s statement from the contractor, or if the managing agent gets the subbies statement but doesn’t check it properly (most of them don’t know what to look for) then you could find that the contractor has a claim against you.  You could even be liable for a contractor engaged by an owner that the OC didn’t know about, for instance in an emergency.

    The definition of who is or isn’t an employee is complex, and could include volunteer workers.

    You will not be refused WC insurance. Claims history can be used to calculate your premium, but is very unlikely to apply in this case.  It cannot be used to refuse insurance.  For the small cost involved it is an essential protection.

    If your managing agent is making these sorts of comments then you have an additional problem of ensuring that they are managing subcontractors properly and that they are keeping adequate records. For instance, the subbies’ statements I referred to above – these are essential for proving that the subby was not an employee.  

    You need to confirm that the Managing Agent is obtaining these statements in all cases, that they are up to date, and that they are properly checked. For instance, many subcontractors answer the question about having their own WC insurance by quoting a personal accident insurance policy – this is not the same, and in the event of an accident they will not be considered as covered, meaning that the responsibility might fall on the OC. 

    Also, many subcontractors don’t actually know whether they are sole traders or employees!  You do not have to validate the information provided, but it is essential to check that the form makes sense.  Your managing agent must be familiar with the rules and must have procedures in place to ensure that you do not get hit with a claim.

    #29259

    Thank you everyone. Other owners I’ve checked with this morning say they do not know whether our cleaners and gardeners are contractors or employees or whether written agreements have been entered into with them or any other facts. Friends from other strata schemes said that even though their OC’s cleaners and gardeners are contractors, they still have WC cover. So the impression I’m getting from SaltyOne (see reply above) and from friends is that many OCs have WC cover as a backup on a just in case basis. Some people could possibly view this as a duplication but to me, it seems a very worthwhile one. Now, how to diplomatically approach the SM and strata committee and convince them to reinstate our WC cover. Does anyone know of any relevant court decisions that I could show the SM, SC and other owners as a persuasion tool? If so, I’d appreciate the case name/s.

    #29264
    scotlandx
    Strataguru

    You don’t need it unless you employ someone or the scheme is mixed residential and commercial. Refer here:

     

    https://www.safework.nsw.gov.au/law-and-policy/employer-and-business-obligations/strata-title-body-corporate

    Don’t waste your money.

    #29271
    Austman
    Flatchatter

    I agree with scotlandx.

    There’s a fair bit of confusion and fear around this topic.

    And it’s simply easier for most Strata Managers to claim that WHS cover is always needed. You after all can’t be too careful.

    The fact is that residential stratas are specifically excluded in the national WHS Act, which most states and territories have adopted to their state/territory versions.

    That’s here in the Work Health and Safety Regulations 2011:

    7 Meaning of person conducting a business or undertaking—persons excluded

    (1) For subsection 5(6) of the Act, a strata title body corporate that is responsible for any common areas used only for residential purposes may be taken not to be a person conducting a business or undertaking in relation to those premises.

    (2) Subregulation (1) does not apply if the strata title body corporate engages any worker as an employee.

    In short, a residential body corporate is not a PCBU and has the same WHS status as a private house, unless it actually employs someone. A contractor is not employing someone. Volunteer workers and visitors need not be covered.

    Although Victoria has not adopted the national legislation, it’s the same.

    A residential strata still needs to meet a duty of care. But that applies to all in the complex including residents and visitors. That’s not WHS. 

    #29269

    @Austman said:
    A residential strata still needs to meet a duty of care. But that applies to all in the complex including residents and visitors. That’s not WHS.   

    Trying to work this out. I would have thought that (NSW) that workers compensation insurance covers the liability under the workplace injury and workers compensation act. 

    What is the link to WHS? even if you have all proper measures in place, someone can still hurt themselves. 

    What is not clear is that if you are under the 7500 threshold – are you automatically covered? 

    #29273
    Austman
    Flatchatter

    @sydprop said:

    Trying to work this out. I would have thought that (NSW) that workers compensation insurance covers the liability under the workplace injury and workers compensation act. 

    What is the link to WHS? even if you have all proper measures in place, someone can still hurt themselves. 

    AFAIK it’s the WHS laws that require the workers compensation insurance.  A residential OC is usually exempt from the WHS laws so doesn’t need the insurance because a claim can’t be made.

    Contractors and others, by law, must meet the WHS laws either themselves or by their actual employer.

    An OC’s duty of care would generally involve building compliance and maintenance according to the BCC/NCC.  And an OC should have public liability insurance which is usually compulsory.

    #29274
    Austman
    Flatchatter

    To add, although all the compulsory strata insurance quotes for my OC has not included WCI, they have included Personal Accident/Voluntary Workers cover.

    Strataman has an opinion on WCI for NSW:

    Insurance

    #29294
    SaltyOne
    Flatchatter

    A lot of very bad advice here.  It is true that an OC is not automatically considered an employer as a consequence of ‘being in business’.  It is also true that “A contractor is not employing someone” – but only if you can establish that the person doing the work really is a contractor, and that can be very difficult to determine.  For instance, many people laying carpet are actually engaged as ‘casual contractors’ but, in the event of an accident, would probably be considered an employee of the company that you signed the carpeting contract with (because that’s what they do for a living, they work almost entirely for the one business, they don’t provide their own tools or transport, they do get training, they don’t advertise their own services, etc, etc).  But the carpet company doesn’t want to pay WC insurance, so they have decided that their employees are actually self-employed sole traders and they don’t need a policy to cover them.  If they have an accident and they discover they aren’t covered like they thought they were, they will come looking to the OC for compensation, and they might succeed.  The best protection is a properly checked subcontractor’s statement, but are you sure that your managing agent is getting one for every subcontractor, that it’s up to date, and that it has been checked for gross stupidities that might invalidate it?  Do you know that the young kid who sometimes helps the gardener put the bins away for a few dollars is covered by the gardener’s WC policy, or that the gardener doesn’t have a policy because he considers himself a sole trader who doesn’t need one?  Not really an issue when the kid drops a bin on his foot – a big issue when he steps out in front of the garbage truck.

    Even a claim that cannot succeed (such as some tradespeople who make a career out of having an accident the first day on the job) can tie up the OC in a massive amount of time, trouble and money defending a case.

    It’s insurance – it covers the times when someone stuffs up, makes a mistake, accidentaly enters into an employer situation, and suddenly becomes liable.   Declare wages paid as zero and the premium will be nominal.

    #29673
    BONNIE L
    Flatchatter

    Hi there, Check this info out, however, if I have read correctly, in my experience, a building cover would include public liability insurance which applies to anyone visiting outside; presumably meaning common property also. 

    Inside the building it’s a different story, and individual household coverage would need to include public liability.  Some do that. 

    #29674
    BONNIE L
    Flatchatter

    Hi all, I’ve never experienced this previously, and can I please know if anyone has had this experience, of a strata manager stating in an owners meeting that the building’s insurance company conducts six monthly checks on policy terms.   If this isn’t a blatant tactic by both parties’ to up the premium, would like to know from other experiences? I know commission kickbacks reasonably apply in strata, however, frequent follow ups sound a bit over the odds to me.  Thanks very much.

    #29675
    BONNIE L
    Flatchatter

    Apologies digesting the above, see workers compensation is the issue.  ln my experience, a licensed trades person or firm has own insurance, and a check by the OC to that effect is routine on any but the smallest jobs, would have thought. In which case, OC would be up for its own workers’ comp coverage for all tradespeople. Does that make better sense? 

Viewing 13 replies - 1 through 13 (of 13 total)
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