Body Corporate Committees .... and the risk of underinsurance
Being a member of a body corporate committee is one of the many voluntary community roles that do not receive the proper recognition for the hard work involved.
The role and operation of a body corporate committee can be daunting. The challenges of satisfying Owner and Occupier's needs, complying with legislative requirements, as well as ensuring the efficient and financial operation of the day to day running is, in effect, the running of a business.
It is important that the committee make informed decisions. As a committee member you may be required to make decisions on subjects in which you have no experience. In these instances it is important to obtain professional advice to ensure you make the right decisions.
Many body corporate committees rely on Strata Managers to source insurance quotations from one or a limited number of insurers as part of their general role in assisting the committee with myriad secretarial, financial reporting and general administrative tasks.
Strata managers receive commissions from Insurers, however many strata managers have very limited insurance knowledge and do not, cannot and should not advise on insurance matters.
To protect the interests of Owners and Occupiers, the wisest move would be to appoint a General Insurance Broker firm to look after the insurance interests of the property. A general broker's services include professional insurance advice as required, but in addition, they have a full understanding of the ramifications of Policy Wordings and Sum Insured calculations, as well as access to a wider number of insurers, specialised risk management services and so on to enable the committee to make informed decisions that ensure the successful running of their property enterprise.
If you are on a body corporate committee, or about to be, we recommend the following Government websites that offer a host of additional information.
http://www.justice.qld.gov.au/justice-services/body-corporate-and-community-management.
http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Strata_schemes/Frequently_asked_questions_strata_schemes.html
Information in this article supplied by the Council of Queensland Insurance Brokers - CQIB
