Insurance for Societies
- There is a variety of types of insurance cover that societies should consider taking out. Because most societies have only limited funds, what is ultimately done will depend on the reconciling of what is essential and what is affordable. However, it is important that every effort be made not to insure for less than the full value of the property at risk, and, wherever possible and affordable, reinstatement and replacement extensions should be taken out.
- It is recommended that at all times quotes be obtained from more than one insurer. Using the services of an insurance broker to advise and assess/ obtain quotations before taking out policies is also recommended. It should be noted that, under the provisions of the Insurance Contracts Act, a copy of policy wording can be obtained before any commitment is made.
Basically insurance for societies is no different to that for any commercial enterprise and insurance policies are issued for a variety of risks usually based on a fire policy for the society’s property and this is then extended out to include a variety of different risks. The cover available to a society is only in general limited by the amount of premium that the society is prepared, or can afford to pay. The main covers that are available are noted below.
Fire and Specified perils
- Provides cover for society property or property which it is contractually liable to insure including both building and contents.
- In addition to the basic fire cover the policy also covers such risks as:
- Lightning and Thunderbolt
- Earthquake and volcanic Eruption Riots Strikes and Civil Commotion
- Water and Oil damage from bursting leaking or overflow of pipes tanks & the like
Impact by vehicles, animals, aircraft and other aerial devices
- Malicious damage but excluding damage by members, tenants or guests
- Storm Tempest or Rainwater
- Accidental Fire Sprinkler discharge
and these covers are governed by the standard fire policy exclusions as detailed in the policy wording of each specific insurance company.
- Policies often cover additional benefits such as:
- Professional fees
- Removal of Debris
- Fire extinguishment costs
- Cost of rewriting records and books of account.
- Usually the policy will also include automatic extensions such as:
- Temporary removal cover for up to 10% of the contents, including whilst in transit
- Automatic reinstatement of the sum insured in the event of a claim and all policies are subject to a clause which provides for an adjustment of the amount payable under a claim where the sum insured is less than the full value of the property at risk of a claim.
- Other extensions which should be considered are:
- Reinstatement and replacement conditions so that the claim payment is based on replacing the damaged property to a condition equal to but not better than when new
- Flood damage
Loss of Income
- Insurance cover can be taken out to cover the loss of income to a society following the operation of a fire or specified peril subject to the provisions and conditions of the policy.
- Insures the society property to the maximum of the sum insured for theft following forcible and violent entry to the property and related losses and the policy extends to cover such things as:
- Damage to premises
- Cost of temporary protection of property
- Cost of replacement of stolen keys
all to an amount where the sum insured is not exceeded.
- The policy does not cover such things as:
- Cash and anything similar to cash
- Theft by anyone lawfully on the premises
- Glass or fire damage
- Motor vehicles or theft from them
- Tobacco and related products
- NOTE: In the case of burglary insurance it is not normal to insure the full value of the property at risk. Analysis of the amount of property that is likely to be stolen in one event should be done and cover taken for that figure.
- Can be covered:
- In transit
- On the society premises
- In the personal custody of an authorised official or society member; and
- the policy can be extended to include damage to safes or strongrooms.
- There are several exclusions which should be borne in mind such as:
- Shortages due to clerical and accounting errors
- Loss not found within three days of the loss
- Loss arising from fraud embezzlement and the like
- Loss whilst the money is in the hands of professional money carriers and the like
- Loss from an unattended vehicle
- Loss from unattended premises unless the money is in a locked safe or strongroom
- Loss due to ransom or extortion unless immediate violence or threat is used
- Covers external and internal glass for which the society is legally liable and the policy will usually be extended to cover such things as:
- Signwriting, lettering and sun control film
- Temporary shuttering
- Repair to damaged frames and alarm tapes
- Replacement of stock damaged by glass
- Removal of debris all to a maximum stated in each individual policy.
- Covers the society, and members, for its legal liability to the public arising from society activities where the damage to property or injury to persons arises from negligence on the part of the society or members.
- The policy can be extended to cover liability arising from property damage or personal injury caused by goods sold by the society.
- Usually at no extra cost cover can be arranged for such extensions as:
- First aid treatment
- Member to member liability (i.e. injury or damage to property by one member to another)
- Car parking
- Property in the physical and legal control of the society, to a limited extent
- Tenants liability
- Unregistered vehicles
and this policy contains the normal exclusions to a public liability policy.
- Any machinery owned by a society can be insured for breakdown subject to the limitations of the various policies issued by individual insurers.
- A policy can be taken out to cover accidental injury to or death of members and/or voluntary workers, including when travelling as part of voluntary activities, for defined events such as loss of income and/or permanent loss of listed body parts. The policy can be extended to include a level of cover for medical expenses involved, home help, funeral expenses, etc.
- The Australian Council for Volunteering can assist with details of providers of this type of coverage.
- Specifically listed items of society property can be insured for a wider range of covers including accidental damage, however, it must be borne in mind that the cost of this cover is much greater than the ordinary Fire and Perils cover.
- An insurance that can be taken out to cover the fraud and dishonesty of employees or office bearers of the society and the cost to the society of such dishonesty.
- Insurance required under the terms of the Worker’s Compensation and Rehabilitation Act in respect of the liability owed by an employer towards an employee.
- It is probably wise for all societies to take out a policy at least for a minimum cover even when they do not believe that they have any employees as the Act does provide for situations where sub-contractors and persons under a contract for service are deemed to be employees for the purposes of the Act.
- Whether a society is incorporated or not the law/government may impose statutory obligations on it. These statutory obligations on societies vary from place to place. For example:
- Section 44 of the Associations Incorporation Act 1984 No 143 (NSW) requires incorporated associations to take out and maintain a Public Liaibility Insurance policy for a minimum of $2,000,000, unless exempt under Section 45 of that Act. Section 70 of the Associations Incorporation Act 1981 (QLD) requires “the members of the Management Committee” to ensure that the incorporated association (forthwith on receiving a certificate if incorporation) takes out insurance in respect of “damage to property, death or bodily injury occuring on the property of the incorporated association” to $100,000 and keeps such cover current at all times.
- Some of the above may be subject to an excess in the event of a claim and this amount will vary according to the insurer.These notes are prepared for the assistance of member societies of the Federation. They do not purport to provide a full account of insurance cover possibilities or details or to provide legal or other advice. Societies should obtain appropriate advice where required.
The Federation is grateful to Keith Dearnley, a member of the Western Australian Genealogical Society Inc, who has worked in the insurance industry all his life, for providing the detail for this Information Sheet.