Strata Corporation Insurance: What It Covers and What It Doesn't

Every BC strata corporation must carry insurance, but most council members couldn't tell you what their policy actually covers, what it doesn't, or what owners are exposed to in the gap. Strata corporation insurance in BC is governed by Strata Property Act sections 149 and 150, and the rules are clearer than councils think. The risk isn't in the law; it's in how the policy is structured, what optional coverages are missing, and what owners assume is covered but isn't. We've sat at many Sea-to-Sky council tables and reviewed many policies. Here's how to read your strata's insurance clearly.

What the SPA requires

Strata Property Act s. 149 requires the strata corporation to insure:

• The building and common property
• Common assets (e.g., furniture in the lobby, recreational equipment)
• Fixtures built or installed on a strata lot by the owner-developer as part of the original construction

The coverage must be on the basis of full replacement value: the cost to rebuild today, not market value and not depreciated value. The policy must include perils of fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots, civil commotion, impact by aircraft and vehicles, vandalism, and earthquake (in BC, mandatory).

Section 150 adds three mandatory coverages:

1. Liability insurance for property damage and bodily injury arising from the corporation's operations
2. Fidelity insurance equal to the corporation's annual operating expenses plus the CRF balance, protecting against theft of strata funds
3. Other insurance the bylaws require, if any

What's not mandatory but should be on every BC strata policy:

• Directors and Officers (D&O) insurance. Protects individual council members from personal liability for decisions made in good faith. Premiums are typically modest and the protection is significant.
• Loss of assessments coverage on owner policies (this is the owner's, not the strata's, but worth flagging)
• Sewer backup, equipment breakdown, terrorism. Typical add-ons that should be confirmed.

Full replacement value: the appraisal that matters

The biggest insurance mistake we see in BC stratas isn't undercoverage on liability, it's an outdated full-replacement-value appraisal driving an undercovered property limit.

A professional insurance appraiser walks the building, measures, identifies finishes and systems, and produces a replacement cost figure. This is what your insurance limit should match. Construction costs in the Sea-to-Sky have risen sharply in recent years, so an older appraisal can materially understate today's rebuild cost. If a total loss happens and your insured limit is less than what rebuild actually costs, the corporation (and ultimately the owners) eats the gap.

What's covered inside a unit (and what isn't)

This is where owner confusion is highest. The strata corporation's policy generally covers, inside each unit:

• The building structure (load-bearing walls, floors, ceilings)
• Original-developer-installed fixtures: cabinets, countertops, flooring, plumbing fixtures, light fixtures, appliances if developer-supplied

The strata corporation's policy generally does not cover inside each unit:

• Owner contents (furniture, electronics, clothing, art, jewellery)
• Owner upgrades (renovated kitchens, custom flooring, added wall panelling)
• Owner liability (someone slips in your unit and sues you)
• Owner additional living expenses if displaced after a claim
• The strata's deductible if the loss originated in your unit

Owner education on this gap is one of the most important things a council and manager can do. We send a one-page summary to every new owner in stratas we manage. Most owners don't read their own policy until after the claim.

Liability and the practical minimum

SPA s. 150 requires liability insurance but doesn't specify a dollar minimum. Practical limits vary by building size and risk profile, brokers typically recommend higher limits for larger or higher-risk buildings (pools, recreational facilities, parkades, multi-storey towers). Your broker should advise on the right limit for your specific property.

Liability covers:

• Slip-and-fall accidents in common areas (lobby, hallways, parkade)
• Property damage caused by the corporation's negligence
• Defence costs for lawsuits against the corporation
• Some pollution and environmental claims (typically capped)

What pushes a building toward higher liability limits:

• Swimming pools or hot tubs
• Underground parkades with vehicle traffic
• Restaurants or commercial tenants in mixed-use buildings
• Recreational facilities (gyms, theatres)
• Vacation rental activity

Fidelity insurance: the underrated coverage

Fidelity insurance protects against theft, embezzlement, or fraud by anyone handling strata funds. That includes the strata manager, council treasurer, bookkeeper, and contractors with banking access.

SPA s. 150(1)(b) requires fidelity coverage equal to:

• The corporation's annual operating expenses, plus
• The current CRF balance

A mid-sized Sea-to-Sky strata's required limit can run well into the seven figures once you add annual operating expenses to the CRF balance. We've seen buildings carrying fidelity limits a fraction of what the SPA formula requires, a significant gap. Fidelity insurance is typically inexpensive relative to the coverage it provides, so this is one of the easiest insurance fixes a council can request at renewal.

D&O insurance: protect the people on council

Directors and Officers insurance protects individual council members against personal liability for decisions made in their role, provided the decisions were made in good faith. It does not protect against fraud or wilful misconduct.

D&O is not mandatory under the SPA, but we consider it essential for every BC strata. Reasons:

• CRT claims increasingly name individual council members
• Defence costs for council members can be substantial even when a claim is ultimately dismissed
• Without D&O, recruiting council members becomes harder year over year

Most BC strata insurance carriers offer D&O as an endorsement to the corporation's package policy at modest cost relative to the protection it provides.

Working with your broker

A few principles we use with every Avesta-managed strata:

1. Use a strata-specialist broker. Generalist brokers can't access the strongest BC strata markets.
2. Re-tender periodically. Even if you're happy with your current broker, the market check keeps everyone honest.
3. Have the broker present at AGM when the budget is approved. Owners get to ask questions and the process is transparent.
4. Maintain a claims log. Every incident, even ones that don't become claims, recorded with dates and outcomes.
5. Get the policy in plain English. Ask the broker for a one-page summary of coverage and gaps. If they can't produce one, that's a sign.

For deeper reading on the 2020 crisis and what's stabilized since, see our strata insurance market pillar post. For deductibles and owner liability specifically, see strata deductibles in BC. For owner-side coverage, see our owner insurance guide.

If you'd like a second look at your strata's current policy (limits, deductibles, missing coverages) reach us through the contact form. We don't sell insurance, but we read a lot of policies, and a 20-minute review often surfaces gaps that should be fixed before renewal.