Christian Lingga discusses the importance of disclosure at the Safe Cladding, Buildings and Façade Innovation Summit

Christian Lingga discusses the importance of disclosure at the Safe Cladding, Buildings and Façade Innovation Summit

On 26th of February, an insurance panel hosted as part of the Safe Cladding, Buildings and Façade Innovation Summit in Sydney.

The panel, titled; “The current landscape for insurance of the building and construction sector” discussed the coordination required between underwriters, insurance brokers, strata managers and owners corporations to minimise gaps in cover for risks containing non-conforming building products.

Amongst the panel was CRM Brokers’ Strata Broking Manager, Christian Lingga, who highlighted reporting obligations and risk management strategies that can assist Owners Corporations (OC). Lingga spoke of the value of having a well-informed OC. When the necessary information and documentation about the non-conforming building products can be submitted to the insurer, the more accurately the risk can be underwritten.

“Why would the insurer take up the risk where non-conforming products are at play, yet not being disclosed? This simply adds needless uncertainty on what is being asked to be insured” commented Lingga.

Lingga discussed the consequences of the duty of disclosure covered in the Strata Schemes Management Act. Commenting that section 27 covers fraudulent disclosure which could lead to the reduction of the Insurer’s liability on a claim, or allow the Insurer to avoid the contract altogether. Section 54 details how the Insurer’s liability may be reduced or excluded due to some act by the insured, which prejudiced the Insurer’s liability.

Our experience is that most buildings with cladding are being offered renewal terms, when full disclosure has occurred and appropriate action plans are in place. The importance of speaking to your trusted insurance broker about the insurance policy and potential implications of non-disclosures cannot be understated.

At CRM Brokers, where we have been provided with the necessary information relating to non-conforming cladding, we have been able to find cover for the building where others find it really challenging.

The Summit brings together key government policymakers and building and construction industry professionals from across the nation to develop strategies to mitigate the risk of defects, finance remediation and build confidence in the sector.

Christian Lingga is CRM Brokers’ Strata Broking Manager and was a finalist for Specialist Broker of Year at the Insurance Business Australia Awards 2019.

 

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