What are some of the issue facing the Body Corporate in regards to Insurance – Workers Compensation Related?
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Hi, I’m Tom from OMB Solicitors, I’m an Associate in our OMB Solicitors body corporate team and today I thought we’d have a bit of a discussion about body corporate insurance.
Specifically, though, I’d like to focus on workers compensation insurance or work cover and volunteers workers insurance or voluntary workers insurance. The reason I wanted to bring up these two types of insurances is because we’ve had a few queries from some committees recently about the types of caretaking that they’re now undertaking at their schemes.
Now, the reason we’re talking about different types of caretaking is because we’re starting to see a lot of our long term management rights agreements come to an end. Now, these are the long term agreements that the developers entered into originally when they were the original owner on behalf of the body corporate 20, 30, 40, 50 years ago, and now they’re starting to come to an end.
So our body corporate is in the position especially with our smaller schemes, where they have an opportunity to explore other types of caretaking arrangements. So what we’re starting to see is a lot of these smaller sized schemes are developing and exploring these alternative options for caretaking of their body’s corporate common property.
Now, the reason this is coming about is, like I say, because a lot of these longer term agreements are coming to an end. But what they’re exploring is your shorter term engagements, some of them of which are actually on up to only a month to month basis.
So what this results in is your individual people like your Joe blogs down the road who’s coming in to maintain certain areas of common property. That’s how this comes into your workers compensation insurance, your work cover, and your voluntary workers insurance.
Now, the reason we’re bringing these insurances up is because when we look at our work cover insurance, which is under our Workers Compensation and Rehabilitation Act, is basically if you engage a person under a contract of service to do anything, then work cover insurance is required.
Now, whilst it’s usually only applicable to employees, it’s not necessarily a be all and end all in the sense that you can still include subcontractors and contractors in that arrangement depending on the specific type of engagement that is there.
Now, the reason I mentioned that is because a lot of our contractors, especially on a shorter term basis, might be under an individual and under an ABM, and in that instance, work cover insurance will need to be taken out, it won’t apply to your companies or organisations, hence why this is mostly applicable to our smaller schemes.
But what that does is essentially if someone comes onto the body corporate’s common property and performs work under a contract of service, the body corporate’s common property becomes a workplace and with that, we need to make sure the body corporate is protected in case there is an accident or injury or anything like that that happens on site.
That’s what the workers compensation or work cover insurance will protect the body corporate from. So the starting point is contact our insurer, contacting our insurer or our insurance broker and identifying, do we have workers’ compensation insurance in place? And if not, asking for a quotation for that amount of cover, which is usually a pretty nominal fee.
So there is no reason why a body corporate shouldn’t be looking at getting workers compensation insurance. Our advice is find out if you’ve got it, if you haven’t got it, get it unless you have a very good reason why you don’t need it. Now, what that leads into is then our voluntary workers insurance.
So voluntary workers insurance is a little bit different. It’s basically to protect the body corporate from anyone who attends on our common property and performs work or tasks that are of voluntary nature.
So that might be our keen activist lot owners who like to go out on site, do a bit of gardening, maintain the pool, change a light bulb in the stairwell, and things like that where we’re not asking them to do it and they’re not getting paid to do it, it’s completely voluntary.
But of course, that may set the body corporate up for liability for injury or worse if that person happened to injure themselves on the common property.
Now, voluntary workers insurance is usually included with the body corporate schemes insurance, but I have seen instances where it’s not, so it’s very important to contact our insurer again or our broker and make sure that we have that as an absolute minimum insurance in place.
Again, it’s normally just chucked in as part of your insurance policy, unless it was specifically requested not to be in there, which would be quite strange, then it should be included. But if it’s not, again, having it included, there shouldn’t be a situation where we don’t have voluntary workers insurance.
It’s a very nominal fee to have it included, like I say, it’s normally just part of your policy anyway, starting point, contact your insurer here and find out whether or not we have that insurance.
So I guess just in summary about these two types of insurances is with especially our smaller schemes where they might be employing or contracting individuals, or you’ve got committee members or owners who are quite keen to maintain areas of the common property, we have those appropriate insurances in place and that they’re sufficient to protect our scheme and our body corporate.
So as a starting point, contacting our insurer, finding out whether or not we have those insurances in place and if we do, if we don’t, sorry, why haven’t we is the question we need to ask and basically getting it and only not having it if there is a sufficient reason as to why.
Your broker should be happy with that if we obviously have brokers available, if you do have any questions about your insurance, of course, though, you can contact OMB Solicitors.
We’d be happy to have a look at those policies and let you know and provide your advice as to whether or not you have those insurances in place and guide you to the right areas to make sure that we have those insurances.