Office bearers liability coverage is a component of strata insurance policies designed to protect individuals who hold positions of responsibility within a strata corporation. It provides coverage for legal costs and potential damages if an office bearer is held personally liable for a wrongful act or omission in their role.
Purpose
Office bearers Liability coverage is crucial for attracting qualified individuals to serve in positions of responsibility within strata corporations. It provides financial protection for office bearers who may face personal liability claims arising from their actions or decisions made in their official capacity.
Office bearers Liability coverage is designed to safeguard the personal assets of individuals who serve as office bearers, such as directors, officers, committee members and trustees in the strata corporation.
Coverage
This insurance typically covers legal defence costs, settlements and judgments resulting from claims made against office bearers for wrongful acts, errors, or omissions committed while performing their duties. It protects against allegations of negligence, mismanagement, breach of fiduciary duty, discrimination, defamation and other similar claims.
Claims examples
Here are some situations where Office Bearers liability coverage may come into play:
A director is accused of making a decision that causes financial harm to the strata corporation and the owners bring a lawsuit against them.
A committee member is accused of defaming a resident during a meeting, leading to a defamation lawsuit.
An officer is alleged to have failed to properly maintain common property, resulting in injury to a resident and a negligence claim is filed.
Exclusions
Strata insurance policies often have exclusions and limitations, which can vary depending on the specific policy and insurer. Common exclusions may include intentional acts, fraud, personal profit or advantage, criminal acts and acts beyond the scope of authority. It is essential to review the policy terms to understand the coverage provided.
Interplay with other coverages
Office Bearers liability coverage is typically included as part of a comprehensive Strata Insurance policy. Other components may include property insurance for common areas, liability insurance for the strata corporation and coverage for individual unit owners. These covers work together to provide a broad insurance package for the strata corporation.
Next steps
It is important to consult with an insurance professional or broker who specialises in strata insurance to ensure that the specific needs of the strata corporation are adequately met. They can help tailor a policy to target the unique requirements and provide guidance on the extent of office bearers liability coverage needed.
This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Honan shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.