Compulsory Insurance that MCST and MC needs (Contractor All Risks, Fire Insurance, Public Liability)
There are numerous general insurance that is legally required by MCST (Management Corporation Strata Title) or MC (Management Committee) to have their landlords and tenants to have for their properties, in order to protect other property owners and themselves. Some examples are basic fire insurance for the building and structure or public liability insurance that some MCST makes it compulsory for landlords.
Beside mandatory general insurance, some insurance that is good to have are contractors all risks insurance, glass liability, etc, etc. You may find more details in this article
What is MCST?
MCST stands for Management Corporation Strata Title and refers to the management body of a building (usually a condominium or building shared with many office owners or shop owners). The management body handles the routine maintenance and caretaking of the building. Periodically, the MCST will handle annual reports, AGM (annual general meeting) and handling of pollings for renovation, refurbishing, change of designs, and enbloc affairs.
The MCST is usually a single corporate set up to manage the building or it can be a large corporation MCST managing many different buildings to pool resources and for economies of scales.
What is MC?
In many cases, the MC is a short form of referring to the MCST.
In some cases, residents refer to MC as the management council, a representative body that is elected from residents or owners of properties in the building.
Almost all affairs of daily maintenance of the building will be handled and referred to the MCST.
What are some insurance that MCST should ask property owners to protect the building and their properties
Here are some insurance that is critical for protecting the properties and MCST
- Fire insurance (All risks) for the structure of the building
- Public liability (especially for commercial building)
- Contractors All Risks (CAR) insurance for landlords who are renovating.
Fire insurance All Risks Insurance for MCST and building owners
A devasting fire can cause the structure of the building to be severely affected and it is going to cost a big sum of engineer fees to assess and certify the building is safe and able to operate as normal.
If the civil engineer finds that the building’s structural integrity is badly damaged in the fire, the building can be deemed a risk, and steps must be taken to rectify the damage. The worst scenario (not unthinkable) is that the building is a total loss and the MCST and landlords must take action to demolish the building at its costs.
This is why fire insurance all risks coverage for the building and structure is so important as the cost of such an event is high and devasting.
All HDB owners are required by law to buy fire insurance of the structure (covering only the building and not the belongings and furnishing in their own homes) precisely because they are worried of devasting events that render a building unliveable.
MCST can also request landlords to have better fire insurance coverage to cover common areas and their own private area liabilities to have peace of mind.
Public Liability policy for commercial building MCST
For many commercial buildings, the public is allowed to enter and use the facilities in the building. A public liability policy helps the MCST to answer any disastrous event that may happen to a member of the public.
A simple case would be someone falling down due to the slippery floor from a rainstorm. The person may sue the building for not managing the wet floor properly due to bad rain cover design or lack of a warning sign.
Other examples can be of visitor cars damaged by trees falling or items dropping from higher heights damaging the visitor’s cars.
A simple public liability policy can help answer any legal or liability case arising from public’s disputes with the MCST
Contractors All Risks to cover landlords and MCST
All buildings will have new landlords or new tenants moving in and out over the years. And any new landlords or tenants may want to do a heavy renovation or simple retrofitting of the premises.
An inexperienced renovation contractor or even an experienced one can have accidents that damage common corridors, common shared facilities or damage building pipes, wires, etc.
In some cases, renovation work may damage nearby neighbour’s properties and incur high hotel bills if the resident needs to live somewhere else temporarily. Some unfortunate cases have occurred where neighbours got injured and racked up high medical and hospital bills to be paid by the renovating units.
Most residential MCST now insists the renovation contractors sign indemnity forms to compensate them in the event of accidents or mishaps. However, we know that many contractors in Singapore are small businesses and would not survive a big financial setback.
The MCST would have no way to seek compensation if the business goes bankrupt. Hence the recent trend is for MCST to request for the contractor and the renovating units to purchase Contractors all risks insurance to cover the period of renovation.
You can refer here to our MCST insurance solution.
f your MCST or you need any more information, feel free to email HM consultancy at sales @ hminsg. com or whatsapp us at 82003255
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