Yet another claim that keeps me awake at night.

A week or so ago a decorative panel on the front of a large building fell down smashing to the ground.

An inspection by builders and an engineer revealed that there was cracking in a large number of the panels and the recommendation was that the building be protected and the panels replaced.

The insurer has agreed to meet the cost of the panel that fell down as a storm claim but the remaining panels are not covered due to a raft of exclusions typically found in all property policies covering faulty workmanship, faulty materials, gradual deterioration etc.

The cost to do the remedial work is several hundred thousand dollars and the body corporate does not have the cash reserves to fund the work. The body corporate has elected to do what appears on the information to hand to be a patch or band aid quick fix.

I have explained to them the danger of this in that having now become aware of the problem/risk, that they now appreciate the implications of not permanently fixing the problem they may well be seen as courting the risk. As such neither their property nor liability policies are likely to respond should another panel fall and cause injury or death to a passer-by or damage to property.

There are many cases on this issue and the policy in fact has a specific exclusion which reads:

We  will not pay for loss or damage caused by non-rectification of any Insured Property defect, error or omission that You were aware of, or should reasonably been aware of.

This is not uncommon exclusion and something that every home and business owner needs to be aware of. By not doing remedial work the risk transfers from the insurer back to the business owner. There of course is always the risk of prosecution under the new Occupation and Health Safety Harmonisation legislation. The bottom line is the risk is just too great to ignore and I am worried for this client who appears to be ignoring the advice.