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Insurance solutions for community association schemes

Insurance for registered community plans with shared common property, landscaped areas and facilities. Explore cover for shared property, liability and other risks associated with managing a community scheme.

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What is insurance for community association schemes?

Community association schemes can bring common property, landscaped areas and shared facilities together under one land allocation as part of a registered community plan. These shared assets can include buildings, roads, paths, pools, services and recreational facilities.

Community association insurance distinguishes shared community property and common areas from individual lots. Depending on the policy and cover selected, individual lot buildings, contents or improvements may be insured separately or require their own insurance arrangements.

What can insurance for community association schemes cover?

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Cover for shared community risks

Insurance solutions for community association schemes can bring together property, liability and governance covers for shared assets and responsibilities. Available cover depends on the policy wording, schedule, limits and exclusions.

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Community property

Can cover insured damage to shared buildings, structures and infrastructure the association owns or is responsible for insuring, such as paths, roadways, pools, spas and certain shared services.

Common area contents

Can cover specified contents owned in shared areas, such as furniture, gym equipment, carpets, artwork, appliances and certain garden equipment, subject to the policy terms.

Public liability

Can respond when the association becomes legally liable for personal injury or property damage connected with insured shared property, facilities or activities.

Fidelity guarantee

Where selected, fidelity guarantee can help protect community association funds against fraudulent misappropriation, subject to the policy terms, limits and exclusions.

Office bearers’ liability

Where selected, this can respond to certain claims against committee members arising from alleged errors, omissions, neglect or breach of duty while carrying out their responsibilities.

Voluntary workers

Can provide specified benefits if a voluntary worker is injured while carrying out unpaid work on behalf of the association, subject to the policy terms and conditions.

Understand the policy limits

Community association policies contain conditions, exclusions and optional sections. Check the policy wording and schedule to understand what is insured and where separate cover may be needed.

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Wear and gradual deterioration

Wear and tear, gradual deterioration, and some developing flaws may be excluded. Maintenance-related damage may also fall outside cover, depending on the policy wording.

Faulty materials or workmanship

The cost of correcting faulty or defective materials or workmanship may be excluded under community association policies. Cover may be available for resulting insured damage, however this is subject to policy wording and claim facts and circumstances.

Individual lot property

Community Property and individual Lots are treated separately. Whether lot buildings, contents or improvements are included depends on the policy wording and cover selected and offered by the insurer. Separate, insurance may be required by lot owners.

Cover not selected

Some sections, including fidelity guarantee or office bearers’ liability, may only operate when they are selected and shown on the policy schedule.

Shared facilities can create different exposures

Community association schemes may include pools, gardens, roads and other shared areas or facilities. The insurance considerations for each asset depend on its ownership, use, policy definitions and the cover selected.

 

​​Shared asset or exposure

​Insurance consideration

​What to consider

​Pools and spas

​Community property and public liability

​Physical damage and liability arising from shared recreational facilities are different exposures. Cover depends on policy definitions and terms.

​BBQ, rooftop and lobby areas

​Depends on the scheme and policy

​Whether these areas fall within Community Property, Common Area Contents or create liability exposures depends on ownership, use and policy definitions.

​Gardens and landscaping

​Community property and specified landscaping benefits

​Some landscaping may have separate limits or conditions. Check how trees, shrubs, lawns and garden equipment are treated.

​Shared common areas

​Common area contents and public liability

​Furniture, furnishings and other shared contents can create property exposures, while injuries in common areas can create liability exposures.

​Roads, paths and services 

​Community property and public liability

​Shared roads, kerbing, footpaths and services can create both physical property and third-party liability exposures.

​Shared plant and equipment

​Community property and machinery breakdown

​Shared plant and equipment may create property and machinery breakdown exposures. Cover depends on policy definitions, selected cover and the schedule.​

Check the value of shared community assets 

If the sum insured is not enough to replace community property at new cost, there may be an uninsured shortfall that the insured needs to bear. Replacement costs can extend beyond the main structures to demolition, debris removal, architects or surveyors, roads, kerbing and services.

Regular reviews and professional valuations can help the association assess whether insured values still reflect its assets and rebuilding costs. How any uninsured shortfall is funded will depend on the scheme’s arrangements.

Risks community associations may need to manage

Shared assets and collective responsibilities can create a mix of property, liability, financial and governance risks.

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Shared property damage

Damage to shared buildings, pools, paths, services or other community property can create repair and reinstatement costs.

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Injuries in shared areas

An injury or property damage involving a shared facility can expose the association to a legal liability claim.

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Roads and infrastructure

Privately owned roads, kerbing, footpaths and services can create both property and liability exposures for the association.

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Misappropriation of funds

Association funds can be exposed to fraudulent misappropriation, making fidelity risk an important consideration.

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Committee decisions

Committee members can face allegations arising from errors, omissions, neglect or breach of duty while performing their roles.

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Water damage

Water from damaged pipes, hoses, drains or shared services can affect buildings and common property. Regular maintenance can help reduce the likelihood and severity of damage.

Why work with Marsh?

Marsh’s strata team can help you understand your risks, consider insurance options and navigate the insurance and claims process.

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Strata-focused support

Marsh’s strata practice supports clients through insurance placement, renewals and claims, with brokers who can explain insurance options in plain language.
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Risk and valuation support

Depending on your needs, Marsh can support asset valuations, property risk engineering, natural catastrophe modelling and emergency planning to inform insurance and risk decisions.
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Claims advocacy

Marsh can help progress your claim, coordinate information, communicate with the insurer and advocate on your behalf. The insurer makes all claims assessment and coverage decisions.

Why work with an insurance broker?

Community association schemes can combine property, liability, financial and governance exposures. A broker can help review existing insurance arrangements, identify uninsured risks and explain how different cover sections may apply to shared assets.

Marsh can also support insurer engagement and renewal negotiations, and help coordinate information and advocate on your behalf if a claim occurs. The insurer makes the final decision on cover.

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Related strata insurance solutions

Explore insurance solutions for people and organisations involved in owning or managing shared property.

Frequently asked questions

  1. Complete and submit a claims form to strata@marsh.com.
  2. Once Marsh has received all required information, the claim will be registered and sent to the relevant insurer within 1 business day. 
  3. After all relevant information has been received and any necessary enquiries have been completed, the insurer will aim to respond within 10 business days. 
  4. Claim updates are provided by the insurer to claimants as agreed, or Marsh will issue written acknowledgement to the notifying party (intermediary or direct customer) every 10 days. 
  5. Marsh will make reasonable efforts to share updates as soon as they become available. 
  6. In most circumstances, the insurer aims to determine the claim within 4 months of lodgement, although this may be affected by exceptional events such as catastrophes or delays in receiving responses.

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Insurance for community association schemes are designed for registered community plans that can include shared common property, landscaped areas and facilities. Depending on the policy, it can address shared property, liability and selected financial or governance risks.

Insurance for residential strata schemes generally focuses on strata-titled buildings and common property. Insurance for community association schemes can also address shared community property and facilities outside individual lots. The exact arrangement depends on the scheme, ownership and policy wording.

The community association may be responsible for insuring Community Property and Common Areas it owns or is legally responsible for insuring. Individual lot property may be included under selected cover or require separate insurance, depending on the arrangement.

Roads, paths, pools, spas and other shared facilities can fall within Community Property or liability sections where they meet the policy definitions and selected cover. Other amenities should be checked against the policy schedule, terms and exclusions.

Personal injury or property damage associated with roads, footpaths, recreational facilities or other shared areas can lead to legal liability claims. Committee members may also face separate allegations arising from decisions, errors, omissions or neglect.

A broker can help review shared assets and uninsured risks, explain insurance options and engage insurers at placement or renewal. Marsh can also assist with claim information and advocate on your behalf, while the insurer makes all claims and coverage decisions.

Need to make a claim?

  1. Download a claim form here.
  2. Complete all sections of the claim form.
  3. Send your completed claim form to strata@marsh.com.
  4. Marsh will lodge the claim with the insurer and advise on the next steps.

This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances.

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.

Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.

For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements (PDSs) available from the relevant product issuer. Target Market Determinations (TMDs) are available here.

Marsh, MAI, JGS and JLT are all businesses of the Marsh group.

LCPA 26/3514