What is Strata, Body Corporate & Community Association Insurance? 

Strata, Body Corporate & Community Association insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property.

• Insurance companies have specialised packages for these types of risks that include both compulsory cover and optional cover such as:
• Damage to the building and common areas from accidental damage, fire, storms or theft;
• Optional catastrophe cover, which increases your building sum insured to cover higher rebuilding costs, if a catastrophe impacts your area;
• Loss of rental income if you have tenants or alternative rental costs if you are an owner occupier and have to move out while the building is repaired following a fire or other damage; 
• Public liability, covering injury to the public and visitors or damage to their property;
• Breakdown of machinery and key electrical equipment; 
• Office & Committee members, covering actual or alleged breach of duties as a committee member, legal defence costs and court-awarded damages; also
• Voluntary workers' personal accidents, covering residents injured when undertaking voluntary work around the property. 

Although only fire and damage to the building, as well as the public liability, are compulsory, most committees chose to include most sections of cover, as it’s easier to budget for the premium annually rather than ask for money to cover urgent repairs. 

We can assist you in reviewing or organise quotations and appropriate insurance cover in accordance with state or territory requirements

Why is Strata Insurance important?

For a start, some amount of strata, body corporate or association insurance is compulsory in all states and territories to ensure owners have cover for repairs for major damage to the building caused by storms or fire or public liability claims if a visitor in injured and legal costs and damages can be substantial.

So, it’s important to know about the covers available, what sections should be considered and how the premiums for each section are calculated.

What does Strata Insurance cover?

Strata, Body Corporate & Community Association Insurance requirements vary between states and territories, so it’s important to get professional advice about the exact requirements and options available for your property.

Main insurance covers:  

• Damage to the building and common areas is one of the compulsory sections. It covers the building, common areas, swimming pool, car parks, walls and ceilings, lifts, spas, tennis courts and common contents against accidental loss or damage. It doesn’t cover the contents of the owner’s unit, apartment or townhouse, this is each owner's risk and it is recommended they have their own cover for personal liability and contents;
• Loss of rental income or alternative rental costs is another of the compulsory sections and will reimburse the owner for loss of rental income if the property is tenanted. If you’re an owner occupier, the insurance will pay for temporary costs to move, place items in storage and rent an alternative apartment if your unit is too damaged to live in and it is repaired;
• Public liability is compulsory and covers the property for both legal defence costs and damages if a guest or visitor is injured and their property is damaged;

Optional sections covered:  

• Machinery and Electrical equipment breakdown is an optional section. This covers the cost of repairing key plant, machinery, and electrical equipment (i.e., switchboards, air conditioning, lifts etc.) if damaged due to sudden internal failure. These items are essential for buildings and can be expensive to repair or replace; 
• Office bearers & Committee members protect the office bearers and members personally against alleged or actual acts of mismanagement of the property. Without this cover, members will have to personally pay their own legal costs and any damages; and
• Voluntary workers' personal accident covering volunteers working around the property for a schedule of accident benefits, as well as domestic assistance, weekly cash payments and travel costs to attend medical appointments. 

Strata, Body Corporate & Community Association Insurance requirements vary between states and territories, so it’s important to get professional advice about the exact requirements and options available for your property.

How are Strata Insurance premiums calculated?

The key factors include: 

• Location, including exposure to flooding, bushfires etc.     
• The age and condition of the building, does the building contain asbestos; 
• The replacement cost of the building, including car parks and facilities; 
• Claims history, the number, type and total cost; 
• Commercial activities carried out in the complex if any, what type, are they take-aways, supermarkets or professional offices; 
• Are there swimming pools, spa or commercial car parks; and 
• What optional covers are to be insured?

Because different properties have different levels of complexity and risk, we recommend talking with your insurance adviser. They are professionals who will work with you to understand your

Frequently Asked Questions

●    What is strata body corporate and community association insurance?

Strata, Body Corporate and Community Association insurance are packages of insurance covers specifically designed for residential and commercial properties that provide cover for fire, machinery breakage, public liability and other risks.  

●    Who buys strata body corporate and community association insurance?  

This insurance is purchased by the committee for all the owners, the premium cost is divided amongst each owner.  The committee also decides on the types of covers chosen that are available in the package, the excesses per claim and the amount of insurance/ sum insured. The decision is usually based on advice and recommendation from a professional insurance adviser. 

●    Is strata, body corporate and community association insurance compulsory in Australia? 

Yes.  Strata, Body Corporate & Community Association insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property

●    What do strata, body corporate and community association mean? 

This is a general term, depending on your state or territory, that refers to a group of people that together own a building or property with a number of buildings, usually with car parking, swimming pools, gardens, lifts and common areas. These can be either residential strata or commercial properties, or a mixture of both. 

●    Why do we need strata, body corporate or community association insurance? 

For a start, some amount of strata, body corporate or association insurance is compulsory in all states and territories to ensure owners have cover for repairs for major damage to the building from fire, storm etc. or lawsuits from personal injury claims, where legal costs and damages can be substantial.