This QLD article is about insurance increases due to (safe) cladding.
Table of Contents:
- QUESTION: What’s been happening with cladding in Queensland body corporate buildings?
- QUESTION: Regarding cladding on QLD strata buildings, what is the compliance if a building was constructed in 1980?
- QUESTION: Our insurance has doubled over the past 12 months. We think this is to do with cladding insurance issues as we have a green board cladding, which has been certified as safe, on our buildings. Is there some sort of lobby group tackling this?
Question: What’s been happening with cladding in Queensland body corporate buildings?
Answer: Yes, the QBCC is out there enforcing orders.
The three stages of the cladding process had deadlines. Those deadlines have passed and the QBCC is going out, somewhat surprisingly, and enforcing those deadlines. We’ve had situations where summons are issued against bodies corporate and owners of buildings. The QBCC has been issuing fines because bodies corporate haven’t done what they were supposed to do.
Body corporate managers who were on the ball really actively managed the repairs knowing this was a big risk and they protected their clients. Well done to all those who have gone through the process and finished, and this was probably due to the professionalism of those body corporate managers. So, yes, the QBCC is out there enforcing orders.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
This post appears in Strata News #642.
Question: Regarding cladding on QLD strata buildings, what is the compliance if a building was constructed in 1980?
Answer: The rationale for the cladding laws was that this type of cladding appeared in the mid 90’s or so – which is why buildings built before then don’t need to worry about it unless they went and did something to their building needing a development approval after 1994.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #587.
Question: Our insurance has doubled over the past 12 months. We think this is to do with cladding insurance issues as we have a green board cladding, which has been certified as safe, on our buildings. Is there some sort of lobby group tackling this?
I live in a complex on the Sunshine Coast, and our insurance has doubled over the past 12 months. I suspect the reason for this is cladding insurance issues as we have a green board cladding on our buildings.
Even though we have a letter from the manufacturer and a certificate from Warrington fire to say that it is a safe product, we are still being shafted. Also, these products are all Australian standard products.
Is there any noise being made to the Government and Insurance companies about this situation. I would think that we are not the only complex with this problem.
I was hoping there was some sort of lobby group or action committee to tackle this outrageous situation around cladding insurance issues.
Answer: This seems to be the norm for buildings with cladding.
We have seen increases for buildings with cladding by up to four times the previous year offered by some insurers. Unfortunately, the circumstances advised by the questioner is certainly not an isolated circumstance, but more so what is we have noticed as the norm for buildings with cladding.
We put the increases down to losses from claims that insurers have already had and uncertainty over how non-combustible the product actually is. This uncertainty means insurers price a policy more conservatively to factor in the unknown risk.
In July 2017, a senate committee asked Wade Martin an Alucobond supplier about standards for non-combustible cladding his answer was “The standard is AS 1530, part 1. There is no such thing as a panel that passes AS 1530 part 1 as the product would be supplied.” In August 2017 ABC’s 7:30 Report also raised questions over flammable cladding products.
We are not aware of any lobby group or action committee that are specifically addressing the high cost of insurance for buildings that contain cladding, however, governments are starting to take action to address the cladding issue.
The Queensland government has recently legislated the Building and Other Legislation Cladding Amendment Regulation 2018 which requires buildings to register their building and engage professionals to inspect the building and where there is cladding complete a risk assessment.
We are of the view that premiums may start to decrease when:
- claims resulting from cladding decrease;
- there is better understanding of how combustible/flammable the products are;
- buildings adopt risk management of properties with cladding to minimise the chance of a major claim;
- Insurers can demonstrate the premium charged is appropriate – capitalism at the end of the day will ultimately determine the direction of where premiums end up.
Owners should also seek alternate quotes from the market.
Below is a history of known fires where there has been a direct connection with the use of ACP.
- 1991 – Liverpool, UK
- 1999 – Garnock, Scotland
- 2004 – Television Cultural Ctr, Beijing, China (7 Injured)
- 2010 – Shanghai, China (58 dead / 70 Injured)
- 2012 – Saif Belhasa Building, Dubai (2 Injured)
- 2012 – Tamweel Tower, Dubai
- 2014 – Lacrosse, Melbourne, Australia
- 2015 – The Torch, Dubai
- 2015 – The Torch, Dubai
- 2016 – The Address, Dubai
- 2017 – Grenfell Tower (71 Dead / 70 Injured)
Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in Strata News #213.
Read Next:
- Safer Buildings: understanding the combustible cladding legislation
- Q&A Can non-fire rated Aluminium Composite Panels comply with National Construction Code
- Strata Finance: The guide for Owners Corporations
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