Sections You May Need to Consider

 

You May Need to Consider – Strata

Risks may be uninsured for a number of reasons, for example:

  • Inadequate loss limits - if the sum insured is less than the amount of your exposure, any loss in excess of the sum insured will not be insured.
  • No insurance - if you elect not to insure a particular risk, you must bear all losses yourself.
  • A deductible or excess under a policy – you must bear the first part of the loss up to the amount of the deductible or excess.
  • Excluded perils - some policies exclude perils, e.g.as flood, storm surge and subsidence. You will not be insured for an excluded peril unless you ask for the cover (which can be expensive as there is generally a limited availability of cover in these areas)

Our concern lies not so much in the fact that you may retain certain insurable risks, but that you may do so without fully recognising the fact, and without making a conscious decision to do so. Such conscious decisions should be reviewed from time to time in the light of changing circumstances. A potential problem area could arise from a series of losses, each subject to a heavy deductible.

A further concern is the possibility of the aggregation of self-insured risks. For example, one incident could give rise to a number of losses, leading to a combined loss figure well above an affordable level (e.g. a fire or explosion at a major location could involve building, plant and stock damage, not to mention legal liability for injured workers and third parties’ property or injury).

With this in mind, we have indicated below a number of sections. While no list of uninsured risks can ever by exhaustive, we have aimed to highlight the more significant omissions from your current Insurance Program. We recommend you review these areas regularly to ensure that you are still comfortable with the scope of cover provided by your existing policy/s.

 

COMMON CONTENTS
Any common area property that is not fixed at your situation that you own or are liable for. For example, carpet in the common areas or garden equipment. Common contents cover does not include items such as the following, temporary floor coverings.

 

VOLUNTARY WORKERS
Cover for voluntary workers sustaining bodily injury during the period of insurance whilst voluntarily engaged in work on your behalf.

 

WORKERS COMPENSATION
Legal liability to employees under workers compensation legislation if your insured property is situated in NSW, VIC, NT, ACT, TAS and WA. No workers compensation cover is provided in Queensland or South Australia.

 

FIDELITY GUARANTEE
Provides cover against the fraudulent misappropriation of your funds.

 

OFFICE BEARERS LIABILITY
Covers the legal liability of office holders and committee members for any wrongful act they commit. This Section is issued on a claims made basis which means it responds to claims first made against you during the period of insurance and notified to the insurer during that same period.

 

MACHINERY BREAKDOWN
Damage which occurs during the period of insurance and requires repair or replacement provided that the Insured Item is within Your Situation and is in the ordinary course of working at the time the Insured Damage occurs.

 

CASTASTROPHE COVER
Cover for any increase in the replacement cost of your insured property following a loss which occurs during the period of insurance:

  1. due to the happening of an event for which the Insurance Council of Australia issues a catastrophe code or other event which occurs no later than 60 days after the catastrophe; and
  2. the event giving rise to the loss is admitted as a claim under the building sum insured section of your policy.

 

FLOOD COVER
The covering of normally dry land by water that has escaped or been released from the normal
confines of any of the following:

  1. a lake (whether or not it has been altered or modified);
  2. a river (whether or not it has been altered or modified);
  3. a creek (whether or not it has been altered or modified);
  4. another natural watercourse (whether or not it has been altered or modified) e.g. a reservoir;
  5. a canal;
  6. a dam.

 

PROPERTY VALUATIONS


Under Insurance

If you are under insured this can have a major effect on a claim on your property insurance. The underwriter has the ability to reduce your claim by the percentage of under insurance. For example if you have a building worth $1,000,000 to replace it, and it is only insured for $500,000 then you suffered from storm damage of $100,000 the claim can be reduced to $50,000 less your excess by the underwriter.

To avoid under insurance issues, we recommend that you get your building professionally valued.