As the combustible cladding blame game escalates focus will turn to the role of strata managers in the supply chain. This will be a particular risk for strata managers in two circumstances.  Firstly, where combustible cladding has been installed during renovations and the strata manager may have been involved in some part of the process, for example recommending suppliers and doing (or not doing!) due diligence on them.

The second type of case will be more serious, where someone suffers loss and damage in a cladding fire where managers are caught up in delays by strata owners and committees in making cladding safe.  

Liability exclusions in the QBE strata professionals PI insurance policy include:

• Occupiers liability from occupation control, management or ownership of real property
• Willful breach of statute, contract or duty
• Fines and penalties over $100,000
• Fines and penalties for gross negligence intentional, willful, reckless or deliberate act, error or omission
• Economic or indirect loss  
• Criminal liability

All of these exclusions will be up for careful review in a worst-case scenario. Managers should do careful due diligence on all product suppliers and keep good written records of their efforts to drive their strata committees towards compliance.