Saturday, January 2, 2010

Introduction (Pages 1 - 4)

By Mike Addison

What trustees need to insure against
Buildings cover
How to deal with sectional title cover
Geyser cover
Contractors on premises

More about the author and Addsure at

Foreword by Professor Graham Paddock:

"Mike Addison is an expert on sectional title insurance who offers sectional title insurance cover, advice and training throughout South Africa. His background as a banker and financial adviser means that Mike has a rare combination of financial and legal experience and expertise in the field.

Addsure runs regular training programmes and strives to raise standards throughout the industry.

Paddocks is proud to be associated with Mike Addison and Addsure is its preferred supplier of sectional title insurance services.

Graham Paddock
March 2007"


One of the most important responsibilities of the trustees is to ensure that the body corporate is adequately insured. All too often this very important area of risk is overlooked, or not enough attention given to it.

In my opinion, the arrangement of the insurance of buildings and the way this aspect of sectional title management is dealt with, is critical to avoiding huge personal losses, disputes and unhappiness.

I have attended many an Annual General meeting where this point is simply covered by presenting a schedule of replacement costs, which are then proposed and seconded; and then the meeting proceeds to the next point on the agenda.

All too often we find buildings underinsured by millions, simply because no recent valuation has been done; or trustees “estimate” replacement costs themselves by multiplying the area by a certain building cost per square metre without accounting for common areas, lifts, VAT, professional fees and demolition costs.

Most owners do not even attend the AGM if the block or scheme is running problem-free. Those in attendance also usually do not fully understand the insurance schedule. By approving the schedule, members / owners at the AGM may well – in their ignorance - be approving underinsured and/or inappropriately insured buildings.

This important area is actually quite easy to deal with - simply a matter of following a formal process and keeping informed, by dealing with specialists in the field or a better-informed managing agent.

This guide assists in equipping managing agents, trustees and owners to deal with this simple but important aspect in the sectional title environment.