#25306
Jimmy-T
Keymaster

    I agree with Peter, that seems odd and merits further inquiry.

    Some insurance policies have exclusions on EC insurance, such as for defamation, because internal politics can become quite nasty and very few people understand the limitations of free speech and fair comment, under the law.

    Other insurance policies will reduce premiums by having an excess so that the first few hundred of any claim is covered by the owners corp.

    Admittedly the new laws in NSW excuse liability of individual EC members who have acted in good faith.

    But if you have, say, a secretary who allows changes to common property on a nod and a wink, and the EC is aware that proper procedure is not being followed, you could be up for tens of thousands of dollars in damages if things go wrong.

    Similarly, if the EC has been told by a qualified person that there is a problem, but they decide to do nothing about it and hope nothing happens, then they are not acting in good faith and could be liable if disaster happens.

    It’s a minefield – your EC really needs to look at your insurance policy and ask themselves if it’s worth potentially losing thousands of dollars just to save a few bucks. Personally, I wouldn’t serve on an EC that didn’t have proper insurance.

    The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.