Understanding the Roles of the Committee, Body Corporate Manager and Insurance Broker

Understanding body corporate insurance roles is important because a number of different parties may be involved, including the committee, body corporate manager, insurer and, in some cases, an insurance broker.

Understanding the role each party plays can help reduce confusion during insurance renewals, claims and discussions about responsibilities. A clear understanding of body corporate insurance roles can also help reduce confusion about who is responsible for decision-making, administration, insurance advice and claims management.

Why is it important to understand body corporate insurance roles?

Insurance decisions can affect premiums, excesses, claims outcomes and the level of protection available to the scheme.

Questions sometimes arise about who is responsible for arranging insurance, who communicates with insurers, who lodges claims and who makes decisions on behalf of the body corporate.

Understanding the different roles can help committees and owners know where to direct questions, who is responsible for particular decisions and how the insurance process works.

What is the committee responsible for?

The committee is elected by owners to make many of the day-to-day decisions required to administer the body corporate.

In relation to insurance, the committee is responsible for making decisions on behalf of the body corporate. This may include reviewing renewal information, considering available insurance options, overseeing claims, managing insurance premiums and determining matters such as insurance excesses where legislation permits.

Although committee members are not expected to be insurance specialists, they are responsible for acting reasonably and making informed decisions based on the information available to them.

Many insurance decisions are closely connected to maintenance responsibilities and ownership boundaries within a scheme. For more information, see our Body Corporate Maintenance Factsheet.

What does a body corporate manager do?

A body corporate manager assists with the administration of the scheme.

This may include maintaining records, coordinating communications, distributing insurance information, arranging meetings and assisting with the collection of documents required during the renewal or claims process.

The body corporate manager often acts as a central point of contact between owners, the committee and service providers. While managers commonly assist with insurance administration, decisions about insurance remain the responsibility of the body corporate and its committee unless otherwise authorised.

What does an insurance broker do?

Some bodies corporate engage an insurance broker to assist with insurance matters.

A broker acts as an intermediary between the body corporate and the insurance market. Depending on the services offered, a broker may assist with insurance renewals, obtaining quotations, explaining policy terms and conditions, communicating with insurers and providing support during claims.

Depending on the broker and the insurers they work with, brokers may have access to a range of insurers, underwriting agencies and insurance products. This can provide committees with access to multiple insurance options through a single point of contact and assist them in understanding differences between available policies.

Insurance policies are not identical, and the lowest premium will not necessarily provide the same cover as another policy. Committees should consider the terms, conditions and exclusions of any policy before making a decision.

Understanding what a body corporate policy covers, and what may remain the responsibility of owners and occupiers, can also assist committees when comparing insurance options. See our A Guide to Body Corporate Insurance for more information.

Can a body corporate deal directly with an insurer?

Yes.

There is generally no requirement for a body corporate to obtain insurance through a broker.

Some insurers offer body corporate insurance directly to committees and bodies corporate without broker involvement. In these arrangements, the committee may work directly with the insurer throughout the renewal and claims process.

Other bodies corporate choose to engage a broker to assist with accessing insurance markets, obtaining quotations, understanding policy options and communicating with insurers.

Whether a body corporate uses a broker or deals directly with an insurer, the committee remains responsible for making decisions on behalf of the body corporate.

Whether a body corporate deals directly with an insurer or engages a broker, understanding who is responsible for each part of the process can assist with insurance renewals and claims.

What happens during an insurance renewal?

Insurance renewals involve gathering information about the scheme and deciding what insurance arrangements are appropriate for the coming policy period. Understanding body corporate insurance roles during a renewal can help committees identify who is responsible for providing information, obtaining quotations and making insurance decisions.

The committee is responsible for reviewing the available information and making decisions on behalf of the body corporate. These decisions often involve balancing premium costs, excesses, policy conditions and the level of cover available to the scheme. The body corporate manager may assist by providing records, coordinating communications and distributing renewal documentation.

Where a broker is engaged, they may obtain quotations from multiple insurers or underwriting agencies, explain differences between policy options and assist with insurer enquiries. Where the body corporate deals directly with an insurer, these discussions generally occur between the committee, manager and insurer instead.

Ultimately, the insurer assesses the risk presented by the scheme and determines whether it will offer cover, on what terms and at what premium.

Insurance arrangements can vary depending on the scheme’s registered plan and insurance requirements. Our Body Corporate Insurance Factsheet explains the types of insurance bodies corporate are generally required to maintain and how those responsibilities may differ between schemes.

Who is involved when an insurance claim is made?

When a claim arises, several parties may be involved.

The committee oversees the claim on behalf of the body corporate and may need to consider issues such as maintenance responsibilities, claim information and insurance excesses. For more information about excesses, see Body Corporate Insurance: Who Pays the Excess?

The body corporate manager may assist by coordinating communications, providing records and gathering relevant documentation.

Where a broker is engaged, they may assist with claim notifications, liaise with the insurer, provide updates on the progress of the claim and help the committee understand the insurer’s requirements, timeframes and assessment process.

The insurer then assesses the claim in accordance with the policy terms, conditions and exclusions and determines whether cover applies.

The outcome of any claim will depend on the policy wording, the facts of the claim and the circumstances of the damage.

Questions about maintenance obligations and the source of damage can also affect how claims are managed. For example, water leaks may involve different responsibilities depending on where the leak originated and who was responsible for maintaining the affected area.

For more information, see Managing Water Leaks in a Strata Property and our Body Corporate Maintenance Factsheet.

How do these roles work together?

Although their responsibilities differ, the committee, body corporate manager, broker and insurer each play a role in the insurance process.

In general:

• the committee makes decisions on behalf of the body corporate
• the body corporate manager assists with administration and coordination
• the broker assists with insurance-related services where engaged
• the insurer provides the insurance policy and assesses claims.

Understanding these body corporate insurance roles can help committees, owners and residents navigate insurance renewals, claims and ongoing insurance decisions more effectively.

Insurance arrangements can vary between schemes, insurers and service providers. Understanding the role of each participant, the insurance obligations of the body corporate and the responsibilities of owners can help committees make informed decisions throughout the renewal and claims process.

Queensland body corporate insurance requirements are governed by legislation, including the Body Corporate and Community Management Act and applicable regulation modules. Further information is available from the Queensland Government and the Office of the Commissioner for Body Corporate and Community Management.

If you are unsure about your scheme’s insurance arrangements, seek information from the committee, body corporate manager, insurer or broker involved in your scheme.