It is the responsibility of the community corporation to insure the common property [s 103(1)].
As a general rule, buildings in a community strata scheme are common property (unless otherwise defined on the plan) and should be insured by the corporation [s 103(1)(b)].
In a community scheme, buildings within a lot are not common property and are the responsibility of the lot owners. However, the corporation's by-laws may authorise or require the community corporation to act as agent for the owners of community lots in arranging policies of insurance [s 34(3)(ca)]. If the by-laws do so, the by-laws may also impose a monetary obligation on the owner of a lot in relation to the payment of the insurance premium [s 37(2)(b)].
Owners in a community scheme also have a duty to insure any part of their property such as a wall, which provides support and shelter to a building or other structure on another lot or on the common property [s 106(1)].
From 27 October 2014, fidelity guarantee insurance must be held by all corporations [s 104(3)], apart from 2-lot community corporations with no administrative or sinking fund and community corporations with common property insurance cover of $100 000 or less [reg 16C(b)]. A policy of fidelity guarantee insurance covers the risk of theft or fraud of the corporation’s funds by any person authorized to handle the corporation’s funds, including a manager. Although the requirement to have fidelity guarantee insurance is a new requirement from 27 October 2014, a corporation may already have fidelity guarantee cover included with its building insurance policy. The insurance cover must be for the amount of the maximum total balance of the corporation's bank accounts at any time in the preceding three years, or $50 000, whichever is higher [reg 16C(a)].
A community corporation must insure itself against risks that a normally prudent person would insure against and the amount of the insurance must be the amount that a normally prudent person would insure for [ss 104(1)—(2)]. In the case of insurance for bodily injury, the insurance must be for at least ten million dollars [s 104(2)].
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