Third party risks insurance mandatory for Owners' Corporations in 2011

The statutory provisions relating to the mandatory requirement for owners' corporations to procure third party risks insurance will take effect on January 1, 2011.

According to the amended section 28 of the Building Management Ordinance (Cap.344), all owners' corporations must procure and keep in force in relation to the common parts of the building and the property of the corporations a policy of third party risks insurance. The minimum insured amount of each policy shall be $10 million per event. 

A spokesman for the Home Affairs Department said today (May 21), "After consulting the Legislative Council Panel on Home Affairs in December 2008, we have decided to appoint January 1, 2011, as the commencement date of the relevant provisions to allow sufficient time for owners' corporations to procure third party risks insurance for their buildings." 

"We strongly advise those owners' corporations which have not yet procured insurance to do so as soon as possible to ensure the best protection of the interests of the owners and third parties." 

"It will also help alleviate the burden of owners' corporations and owners in cases of accidents in the common parts of the building which cause injury or death of a third party, which could be heavy in financial terms," the spokesman said.

As at this April, about 93% of the buildings with owners' corporations have already procured third party risks insurance. The Government will continue to encourage and assist owners' corporations which have not procured third party risks insurance to do so by providing them with the necessary assistance and publicising the mandatory requirement.

Ends/Thursday, May 21, 2009
Issued at HKT 13:31