Popular for its resistance to fire and its insulation properties, asbestos was widely used in a range of building products such as roofing, flat and corrugated sheeting, cement pipes, and floor tiles until the late 1980s. If products containing asbestos are incorrectly handled, the fibres can be released into the air, become trapped deep in the lungs, and cause significant health problems over time.
An Owners’ Corporation has a duty of care to understand the hazards present at their properties to prevent harm to visitors, tenants, workers, and contractors. This article explains why disclosure of asbestos to insurers is essential and how you can understand and manage the associated risks.
IS YOUR PROPERTY ASBESTOS AWARE?
A total ban on asbestos came into effect in Australia on 31 December 2003. While it is unlikely that properties built after 1990 will contain the material, completion of an asbestos report will confirm either way. Strata Managers can request these reports on behalf of the Owners’ Corporation if they give the necessary permission. Obtaining an asbestos report demonstrates the Owners’ Corporation has taken prudent steps in identifying potential hazards on the property. This is very important from an insurance perspective because identifying and reporting issues pertaining to properties is part of your duty of disclosure as a Strata Manager and owners’ corporation.
While it is not a requirement for all properties to have an asbestos report, it is often raised by Strata Managers at AGMs. If an event that gives rise to an insurance claim occurs in a building containing asbestos, it will often be significantly more expensive to remedy because of the added cost of asbestos removal by licensed operators. Due to the duty of disclosure, there may be some complications with the claim being paid by the insurer. If the claim is totally or partially denied then there could be a liability that sits with the Committee, especially if the Owners’ Corporation has voted against an asbestos report at an AGM.
KEY ITEMS TO NOTE IN THE ASBESTOS REPORT
The report will contain important details, including the location of the suspected asbestos, its condition, and risk rating. The report will also outline actions to be taken, requirements, and recommendations.
If items containing asbestos are in good condition and the material is bonded/non-friable, the actions will likely be to leave it in place and not disturb it. If the items are considered high risk and the material is friable or easily crumbled, the action items will likely be to remove, replace and restrict access. These items can be overlooked when the report is not read carefully.
The report will also include a scheduled review date. It is important to schedule a regular follow-up inspection and report to ensure the condition of the asbestos (which can be affected by factors such as the weather) is monitored.
WHAT IS AN ASBESTOS MANAGEMENT PLAN/ASBESTOS REGISTER?
If Asbestos has been located, an Asbestos Management Plan will be put in place by a licensed contractor who specialises in asbestos management. An Asbestos Management Plan & Asbestos Register is used to identify and document asbestos risks and the safety procedures that must be conducted to minimise exposure. This is kept on-site in a document box. If any renovations, building maintenance, or demolition works involving asbestos-containing materials (ACM) are planned, the persons involved must review the plan to ensure compliance with the Work Health and Safety Act Regulation 2011 and Codes of Practice.
WHY DISCLOSURE OF ASBESTOS TO INSURERS IS CRITICAL
When seeking insurance quotes for a property, your broker needs to know as much information as possible. This includes the disclosure of asbestos. If the presence of asbestos is not disclosed to the insurer and a claim relating to asbestos later arises, it may exceed the percentage of asbestos they can underwrite. Consequently, the insurer may not pay a claim because the asbestos risk would not have been underwritten if this information had been known.
WITH YOU ALL THE WAY
We have access to insurers who will provide insurance for properties with asbestos. Maintaining an updated register and knowing the condition of the asbestos will be key in the insurer agreeing to provide coverage. To find out more, feel free to reach out at any time.