Strata insurance is a statutory requirement for owners corporations in NSW. The policy must provide appropriate cover for the building and common property, as well as public liability for incidents occurring on common property.
Insurance plays a central role in protecting the financial position of a strata scheme. Adequate cover ensures that significant events, such as major damage or liability claims, can be addressed without placing undue burden on individual lot owners.
Under NSW legislation, the owners corporation must insure the building for its full replacement value. This requirement underscores the importance of maintaining up-to-date valuations and reviewing policies regularly.
In addition to mandatory cover, schemes may consider additional protections depending on their circumstances. Decisions about coverage should be made with reference to the building’s age, condition and risk profile.
Insurance arrangements require careful oversight. Committees must review renewal terms, understand policy inclusions and exclusions, and ensure that documentation is properly retained.
Administrative support contributes to clarity in this process. Clear records of insurance policies and related decisions form part of the broader governance framework of the scheme.
As regulatory expectations around transparency and disclosure continue to evolve in NSW, maintaining accurate insurance records and reviewing policies regularly remains a prudent approach.