Commercial Property Insurance Online :: News
SHARE

Share this news item!

Strata Storm Claim Ruling Puts Defect Exclusions in Focus

The decision underlines the importance of maintenance evidence, engineering reports and clear expectations before a loss occurs

Strata Storm Claim Ruling Puts Defect Exclusions in Focus?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

A recent Australian Financial Complaints Authority decision has highlighted a difficult but common issue for strata communities: damage that happens during a storm is not always insured storm damage.
The dispute, reported on 5 November 2026, involved an owners corporation claim for a collapsed parapet wall, with the insurer declining cover on the basis that defective design, materials or workmanship were the dominant cause rather than the weather event itself.

The case is useful for strata committees because it shows how closely insurers and external experts may examine the condition and construction of a shared building element after a claim. According to the reported decision, engineering evidence pointed to an unreinforced, hollow and effectively freestanding wall, along with signs of prior cracking and movement. AFCA accepted that the storm coincided with the final collapse, but found the underlying inability of the wall to resist lateral loading was the proximate cause of the damage.

That distinction matters. Strata policies commonly respond to sudden insured events, but they usually contain exclusions for defects, gradual deterioration, wear and tear, faulty workmanship or known maintenance problems. The precise wording varies, and some policies contain exceptions for resulting damage, but the ruling is a reminder that exceptions may not restore cover for the defective item itself. This is why understanding what strata insurance does and does not cover is more than a theoretical exercise.

For owners corporations, the practical lesson is not that every defect will defeat every claim. It is that the strength of the scheme’s evidence can become critical. Committees may wish to keep clear records of building inspections, engineer reports, maintenance decisions, defect registers, repair budgets and any advice received about common property risks. Where a building element has known movement, cracking, waterproofing failure or structural concern, simply waiting until renewal or until the next storm season may create avoidable uncertainty.

The ruling also reinforces the importance of separating claim lodgement from claim expectations. A strata manager or committee should generally notify relevant damage promptly, preserve evidence and document the sequence of events, but the final outcome will depend on policy wording, causation and expert assessment. Owners who want a broader overview of process steps can revisit this guide to a strata insurance claim.

The broader message for apartment buildings and mixed-use schemes is that risk management and insurance are increasingly inseparable. A well-documented maintenance history will not guarantee cover, but it can help clarify what happened, what was known, and whether the scheme acted reasonably before the loss.

Published:Tuesday, 10th Nov 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Rate this article

0 Comments

No comments yet. Be the first to share your thoughts.

Insurance News

Mallee Hail Is a Sharp Reminder About Harvest-Time Insurance Gaps
Mallee Hail Is a Sharp Reminder About Harvest-Time Insurance Gaps
10 Nov 2026: Paige Estritori
A damaging hailstorm across Victoria’s Mallee has turned a promising harvest into a difficult insurance and cash-flow test for affected grain growers. ABC Rural reported on 6 November 2026 that hail swept through districts including Birchip, Wycheproof and Quambatook, damaging thousands of hectares of wheat, barley, lentils, canola and other crops just as many paddocks were ready to harvest. - read more
Strata Storm Claim Ruling Puts Defect Exclusions in Focus
Strata Storm Claim Ruling Puts Defect Exclusions in Focus
10 Nov 2026: Paige Estritori
A recent Australian Financial Complaints Authority decision has highlighted a difficult but common issue for strata communities: damage that happens during a storm is not always insured storm damage. The dispute, reported on 5 November 2026, involved an owners corporation claim for a collapsed parapet wall, with the insurer declining cover on the basis that defective design, materials or workmanship were the dominant cause rather than the weather event itself. - read more
Healthcare liability pressure puts clinic renewal evidence in focus
Healthcare liability pressure puts clinic renewal evidence in focus
10 Nov 2026: Paige Estritori
A new Australian healthcare professional liability market update points to a sharper divide between general insurance market conditions and the experience of healthcare organisations arranging malpractice and professional liability cover. Lockton’s 1 November 2026 update says established insurers remain selective, claims inflation is affecting attachment points and underwriters are looking more closely at how clinical governance works in practice, not merely whether accreditation exists. - read more
WA Child Safety Changes Put Fitness Compliance in the Spotlight
WA Child Safety Changes Put Fitness Compliance in the Spotlight
10 Nov 2026: Paige Estritori
Western Australia’s updated Working With Children Check laws are a timely reminder that fitness business risk is not limited to physical injury, equipment damage or venue incidents. The changes, in effect from 17 September 2026 and highlighted by AUSactive in October, mean certain adverse Working With Children outcomes from other Australian jurisdictions can now affect a person’s ability to work with children in WA. - read more
APRA AI remarks put risk data under the spotlight
APRA AI remarks put risk data under the spotlight
10 Nov 2026: Paige Estritori
APRA’s latest comments on artificial intelligence in insurance have shifted attention from future technology to a practical issue for today’s small operators: the quality of the information insurers use to understand risk. For domestic and home service businesses, sharper underwriting could eventually mean more tailored pricing, but it may also make incomplete records, unclear operations or higher-risk work harder to overlook. - read more


Commercial Property Insurance Articles

How business interruption insurance works with commercial property cover
How business interruption insurance works with commercial property cover
Business interruption insurance can help protect income when insured property damage disrupts trading, rent collection or normal operations. This guide explains how it works alongside commercial property cover, including claim triggers, indemnity periods, gross profit, loss of rent and key policy limitations. - read more
Natural Disasters and Your Commercial Property: Is Your Insurance Adequate?
Natural Disasters and Your Commercial Property: Is Your Insurance Adequate?
Australia is known for its diverse landscapes, but one of the harsher realities it faces is the increasing frequency of natural disasters. From bushfires in the outback to devastating floods in urban areas, these events can have severe implications for commercial properties. Business owners must navigate the challenges of not only protecting their assets but also ensuring the continuity of their operations. - read more
Is Commercial Property Insurance Mandatory for Businesses?
Is Commercial Property Insurance Mandatory for Businesses?
Commercial property insurance is designed to help protect business premises, equipment, stock and other physical assets from insured events such as fire, theft, vandalism, storm damage and other property-related risks. It may not be mandatory for every business, but it is often an important part of managing the financial impact of unexpected damage or disruption. - read more
What does Commercial Property Insurance cover?
What does Commercial Property Insurance cover?
Commercial property insurance is vital for anyone who owns or operates a business that involves a physical location. This type of insurance protects your business premises, equipment, and any inventory within the space. Whether you're a landlord, a small business owner, or a property investor, having a solid understanding of commercial property insurance is essential. It not only safeguards your physical assets but also provides peace of mind for your financial investment. - read more
What to do if a commercial property insurance claim is delayed or declined
What to do if a commercial property insurance claim is delayed or declined
If a commercial property insurance claim is delayed, disputed or declined, policyholders can take practical steps to clarify the insurer's position, strengthen their evidence, use the insurer's internal dispute resolution process and, where eligible, escalate the complaint to AFCA. - read more

Knowledgebase
Indemnity:
A legal principle that stipulates that insurance policies should restore the insured to the financial position they were in before the loss.