Short answer
An NSW owners corporation must insure the building under a damage policy that covers rebuilding or repairing it so its condition is not worse than when new, and must hold public liability insurance of not less than $10,000,000 for any single event. Depending on the scheme, other cover — such as workers compensation and voluntary workers insurance — may also be required. The strata policy does not insure the contents inside individual lots.
The building (damage policy)
Under the Strata Schemes Management Act 2015, the owners corporation must insure the building and keep it insured under a damage policy with an approved insurer. That policy must provide that, if the building is destroyed, it is rebuilt or replaced so that every part is in no worse condition than when new; if damaged, the damaged part is repaired or restored to the same standard. It also covers the cost of removing debris and the fees of architects and other professionals needed for the rebuild. The building must be insured for at least the amount worked out under the regulations, which is why schemes obtain a replacement-cost valuation.
Public liability
The owners corporation must also hold public liability insurance covering injury or property damage connected with the common property — for not less than $10,000,000 for each event. This is what responds if, say, a visitor is injured in a common-property area.
Other required cover
Depending on the scheme’s circumstances, the Act requires further cover — for example workers compensation where the scheme engages workers, and cover for voluntary workers. The owners corporation may also take out additional optional insurance, such as office-bearers’ liability, by resolution.
What is not included
The strata policy stops at the building and common property. It does not cover the contents of your lot, your fit-out improvements, or your personal liability inside your unit — those are for an owner’s own contents (and, for investors, landlord) insurance.
Keeping every required cover in place
For a self-managed scheme, the real task isn’t understanding the rules — it’s making sure nothing lapses. An automated system such as Straita holds the policy details, renewal dates and valuation in one place and prompts the committee before anything falls due, so each required cover stays current and the committee simply approves it.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — insure the building (s 160), damage-policy requirements (s 161), and other mandatory insurance including public liability (s 164).
- NSW Government — Strata schemes (Fair Trading) — strata insurance obligations.