Insurance placement duties
Claims that the building cover lapsed, was inadequate or was not renewed.
Strata Manager Professional Indemnity
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Strata Manager Professional Indemnity
Professional indemnity for strata and community title managing agents.
The strata manager arranges the building's own insurance, and that is where a large share of claims begin. A policy allowed to lapse, a reinstatement value years out of date, or a defect report never put to the committee can leave an owners corporation badly short. Professional indemnity generally responds to claims that the management of the scheme caused that shortfall.
What is it?
Strata managing agents administer owners corporations and bodies corporate across residential towers, townhouse schemes, mixed-use and commercial buildings: levies, budgets, meetings, records, maintenance, by-law enforcement and placement of the building insurance. Agents are licensed under state property agent legislation, with licence conditions that commonly include professional indemnity cover, and Strata Community Association membership sets further practice standards.
What does strata manager professional indemnity cover?
Levies and financial administration
Exposure from budgets, levy calculation and the funds held for a scheme.
Meetings and common property
Claims about meeting process, by-law enforcement and maintenance decisions.
What affects the cost?
- Number of schemes and lots managed
- Scheme values and building ages
- Administrative and sinking fund balances held
- Staff numbers
- Claims history
Worth raising on the call
- Undervalued reinstatement figures usually surface at claim time, years after the advice.
- Fidelity cover for staff dishonesty is generally a separate section from professional indemnity.
- Defect-affected and combustible cladding buildings materially change how an agent is assessed.
Claims we are commonly asked about
Building policy lapses at renewal
A renewal notice for a mid-rise scheme is not actioned and the building sits uninsured for eleven days, during which a burst riser floods several levels. The owners corporation claims the repair cost that would otherwise have been met by the building policy.
Reinstatement value years out of date
A scheme is insured on a sum insured last valued six years earlier, and after a fire the settlement falls well short of the rebuild cost once demolition, professional fees and current construction rates are counted. The owners claim the shortfall from the agent who renewed on the old figure.
Special levy struck on the wrong schedule
A special levy for remedial works is calculated against an outdated unit entitlement schedule and notices go to every lot. The scheme faces tribunal challenges, has to re-issue and re-collect, and the agent is claimed against for the cost of the exercise.
Worth confirming in the wording
- Worth confirming whether failure to arrange, renew or correctly value the scheme's own insurance is expressly addressed rather than left to general professional services wording.
- Worth confirming how claims connected to combustible cladding or known building defects are treated, since these are frequently the subject of specific terms.
- Worth confirming whether disputes about the agent's own fees, commissions and remuneration disclosure fall inside or outside the cover.
Common questions
Does the owners corporation's building insurance cover me as the agent?
Generally not. The scheme's policy is arranged for the owners corporation's own property and liability, and it does not usually respond to a claim that the managing agent's conduct caused loss. Agents typically hold their own professional indemnity, and often fidelity and management liability alongside it.
Is professional indemnity required to hold a strata managing agent licence?
In several states it forms part of licence conditions for property or strata managing agents, and the required limit is not the same in each. Requirements have changed over time, so the current position should be checked with the relevant state fair trading or consumer affairs regulator.
Does it cover levies the scheme was never able to collect?
Generally not as a debt in its own right. Unrecovered levies are usually the scheme's commercial position. The policy typically responds only where the owners corporation says a negligent act or omission by the agent caused the shortfall, such as levies never issued or struck incorrectly, subject to the policy terms.
What does strata manager professional indemnity cost?
It depends on the portfolio rather than sitting at a set price. The usual drivers are the number of schemes and lots managed, scheme values and building ages, administrative and sinking fund balances held, staff numbers, exposure to defect or cladding affected buildings and your claims history.
General information only. Cover, limits and exclusions depend on the PDS, TMD, eligibility, underwriting and the policy terms. See professional indemnity insurance for the wider picture.
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