Are Owners Conducting Paid Work Covered by Strata Insurance
Where a body corporate is considering engaging an owner to conduct paid work, consideration should be placed on the level of cover provided by the strata insurance policy.
All insurance policies should be read individually as they will each vary to some degree. Most strata insurance policy wordings will contain an extension in the public liability section of the policy, despite individual wording differences, which is intended to provide cover for voluntary workers.In the basic interpretation, a Voluntary Worker, does not mean a person who receives a payment, reward or remuneration for their services, such as employees, or contractors. Strata policies generally will not extend to provide any cover for owners who undertake paid work for the body corporate.
The first consideration when owners conduct paid work is injury or property damage caused bythem to other parties.In such cases, the policy would not extend to cover claims for compensation made against the ownerif the owner injures or causes property damage to another party, as they are not deemed to be a volunteer and so, they are not insured by the policy. So, the owner would need to take out a separate public liability insurance policyin order tohave the appropriate cover. Where the body corporate are drawn into claims due to the actions of the owner, the policy will only respond to cover the interests of the body corporate. It should be noted that both the body corporate and the owner conducting the work could also be held jointly liable in the event of a claim – as an example the owner could have a 70% contribution & the body corporate a 30% contribution to compensation.
Secondly, injury the owner sustains while conducting work for the body corporate should be considered. The public liability section of a strata insurance policy is designed to provide cover for the body corporate if they become legally responsible to pay compensation for personal injury or property damage. While there is no specific exclusion for claims made against the body corporate for owners who are paid for their work (provided they are not an employee), the insurer will assess the body corporate responsibility/negligence at the time of a claim. For example, if the owner decides to clear gutters and erects a ladder at no direction of the body corporate and the owner sustains injury from falling off the ladder. While the question of legal responsibility is best to be answered by legal professionals, the insurer could decide there is enough ground to defend the claim as the body corporate did not tell the owner to use the ladder and therefore, they were not negligent. In this case, if the insurer is successful in defending the claim the owner could then be left to manage the financial impact of a major injury without grounds for compensation.
There are separate Voluntary Workers cover in Strata insurance policy which is designed to provide payments for death and specific injuries for volunteers while that are conducting work or duties on behalf of body corporate. It is anevent based cover and does not have a specific requirement of the body corporate being negligent for the injury. This cover is not available where an owner is paid for the work they do. The equivalent cover for owners conducting paid work would be a personal accident insurance policy.
While there is no specific requirements placed on the body corporate or the owner to take out any insurance, we do recommend considerations into public liability as a minimum requirement for the owner conducting paid work. Personal accident insuranceshould also be considered for paid workers who are not employees, but this should be at the workers discretion.
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.