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[Austman]

This is such an important strata issue, so I’ve tried to make a summary:

1. An Owners Corporation/Body Corporate is a legal entity and as such is legally liable for damage that it is responsible for.
2. Courts in Australia have ruled that liability generally requires negligence.  ( source: https://www.lawhandbook.org.au/handbook/ch18s01s02.php )
3. With few exceptions, an Owners Corporation/Body Corporate must have building insurance.
4. An Owners Corporation/Body Corporate must have liability insurance.
5. The Owners Corporation/Body Corporate’s building insurance must cover the Strata Act’s definition of a “building”, for insurance purposes, which usually includes lot fixtures and fittings but can exclude temporary wall, floor and ceiling coverings (e.g.  carpet, wallpaper) and, in NSW,  paint.
6. Some insurance companies might decide to pay for damage beyond their policy requirement.  That’s a decision of the insurance company.
7. An Owners Corporation/Body Corporate might decide to pay for damage beyond its legal obligation.  That’s a decision of the Owners Corporation/Body Corporate.
8. An insurance policy exclusion does not mitigate an Owners Corporation/Body Corporate’s liability for damage that it is responsible for.

I’ve been personally involved in many strata insurance claims in NSW, VIC and ACT.  Both as an OC committee member (NSW, VIC) and as an owner (NSW, VIC, ACT).  So I know how complex it can be.

Any changes or edits?

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