If we are talking about a Strata building Insurance claim the rules apply the same throughout Oz (because it’s too difficult for the big insurers to have different rules for each state).
It’s the owners job to inform the SM of any significent increase in their buildings value.
BUT most policies have a section called LOT OWNERS FIXTURES and a value (mine is $25,000) and so if my total improvements are less than $25,000 I’m automatically covered. If the improvements are more than this the SM needs to increase the insurance value of the lot (owner pays).
If the retaining wall failed for any reason, (lack of maintenance or valid insurance claim) the Strata would be reasponsible for the repair of all the damage caused.
Sounds to me the failure was due to lack of maintenance so not an insurance claim so Strata would have had to pay for everything.