Just as one problem appears to be solved (see posting above) another one rears its ugly head. This time from New South Wales.
The following email explains the problem:
I was wondering if I could call on your expertise to assist with the following.
The local council has introduced an Awning Policy. This has not come about from any recent events locally and is seen as a bit of a revenue raiser more than anything else.
The council sought legal advice on this policy but not insurance advice and the result is a rather ugly policy which no insurer would accept.
Basically, the council wants every main street awning certified by an engineer every five years (or following damage which the council considers renders an awning unsafe).
They want to be indemnified under the property owners’ liability policy (See document Awnings-Policy-POL-050).
They also want in respect of the awning, noting the Council’s interest as “owner”.
This obviously will not be accepted by any insurer. Can you please give some guidance as to how we could keep both parties satisfied?
Scott [surname and email provided]
After discussing this with one of the LMI team, Max Salveson, I wrote back to Scott as follows:
Thanks for your email Scott. The following are my first thoughts.
One thing which never ceases amaze me is the ability of bureaucracies at any level to make simple things more difficult and to complicate the process of daily life, including the activities of running a small business. I am not sure if this is just a Wagga Wagga thing or something taking place state wide. Even if it is just for Wagga Wagga, I fear that it may
spread to other councils after the next meeting of council officials.
This whole proposition seems to be more about extending the control and income of the Council. What the Wagga Wagga council is proposing is setting up a new local government department “the Department of Blinds and Awnings” to monitor and manage property not owned by the council.
I have made inquiries of our municipality in Melbourne (Stonnington) and have been advised that unless there is an overlay (heritage or otherwise) no planning permit is required and the management of the awning is the responsibility of the building owner. No indemnities or insurances are required, regardless of whether a planning permit is required.
Since the liability crisis when it was agreed that business and all levels of government including local government would accept responsibility for their own negligence, I thought, as did many in the community, that this type of problem had diminished.
There was a case a year or so ago when Port Phillip Council tried to do something similar with a sandwich board that a café was seeking to place outside its premises at Port Melbourne. This was referred by LMI to an insurance broker for the Municipal Association and after discussion. The Council agreed with the Government’s undertakings to the Liability Working Party, and the Municipal Association instructed the Council to back off. The council subsequently approved the siting of the sandwich board on the footpath subject to a guarantee by the café owner to indemnify the Council for all claims arising out of the presence of the sandwich board on the footpath caused by the negligence of the café owner or his/her servants or agents.
The insurer had no difficulty in noting the contractual liability as an agreement specified in the Schedule.
Under the Wagga Wagga council proposal as I understand it, the chain with potential legal liabilities will increase:
a) The common law liability currently with the Owner of the blind will remain.
b)The engineer becomes involved because his reports will include him in the professional risk in relation to problems with blinds.
c) The Council by setting up this process and creating a situation (notwithstanding the indemnities) is creating an additional legal liability for itself because it is managing the process and may become liable in negligence. The insurance policy is unlikely to be extended as requested or may have lapsed and/or the personal guarantor may be impecunious.
One would have thought that verandas and the soundness of the building structure on the footpath alignment would be far more important to public safety than blinds and awnings. Perhaps that might be their next move.
I would not expect any insurer to agree to:
• Noting the Council as Owner when it is clearly not.
• In the light of the liability crisis, agreeing to provide cover to the Council for a complete hold harmless.
The suggestion that property owners would pay the cost of the Council administering such a scheme is ridiculous and yet another cost of doing business which in this country is already far too high and a disincentive to starting or remaining in business. Councils and all levels of government need to remember that SMEs are the biggest employer in this country, and the impact they have on business every time they put more restrictions and costs onto SME’s. Payroll tax, land tax and rates are already at a crippling level.
Is there a problem with collapsing blinds and awnings in the City of Wagga Wagga other than the usual involvement of trucks, vans and council garbage trucks impacting verandas? The question that needs to be asked is: can it be managed more cost effectively than is the case with the council’s proposal?
Surely this is a matter which property owners rather than insurers should become agitated about and getting their local Chamber of Commerce to be up and about with the Mayor and Councillors in no uncertain manner. When are the Council elections due? [I subsequently learned it was only 2 weeks ago!].
The Federal Government is currently awaiting a report on de-regulation so discussions with State and Federal politicians on this issue could also be useful.
One would normally have alerted ICA to this type of development.
In the light of the liability crisis, they may still be able to consider this one and exert some influence with the powers that be. I am not sure if they would help now as they did in the past.
I hope that this assists. Let me know if there is anything more I can do for you on the subject but think the Chamber of Commerce, worded up by you as to the issues as outlined above, would be the best starting point.
I have since learned from the broker that he is meeting with Council next week and, like in Adelaide and Port Melbourne, I do hope common sense prevails.