Body Corporate

Body corporate insurance

The body corporate must insure the built sections and common property to the replacement value thereof. The standard valuation procedure entails measuring up and quantifying all common property and registered sections, taking into account the standard of workmanship and finishes as observed in a representative sample unit. The participation schedule, as approved by the Surveyor-General, provides the registered section sizes. The valuer also references the approved sectional plans in determining which structures and areas fall under the body corporate’s responsibility. By definition, the body corporate is responsible for all areas outside of the median line that runs through the outer walls, ceilings and floors of the registered sections, such as exterior wall surfaces, doors, windows, roofs, geysers.
The body corporate is NOT responsible for insuring owner-installed unit upgrades, such as swimming pools, lapas, awnings, carports, air-conditioning systems, security features, luxury interior finishes etc. The onus is therefore on the individual owners to report to the trustees the replacement cost of their unit upgrades which they wish to be included in the body corporate policy for their own account. On special request, Mirfin will assist owners in assessing the value of their unit upgrades. This special service attracts an additional fee, and the owners concerned must enable full access to their unit on the date of inspection.


The valuation excludes any alterations not reflecting on the latest approved sectional plan, as it can be assumed that they are not approved by the council and therefore illegal and possibly uninsurable.

Live valuation updates

Insurance renewal is now so much easier with the Mirfin Dashboard!

Renewing buildings insurance by applying a static percentage annually can be problematic as an annual escalation rate of 10 or 15% is often not market-related. The effect of compound interest will very quickly result in building owners either being under-insured or overpaying on insurance premiums. This practice almost never provides correct insurance cover.

The Solution:

The Mirfin Dashboard offers a live update of your scheme’s replacement value during the mandatory 3-yearly valuation cycle.

Trustee liability protection

If cost is your primary concern when choosing a professional valuer, you are potentially making yourself personally liable for any shortfall in claim pay-out suffered by your scheme due to valuer error.  An insurance valuation is not a scientific exercise but is very much susceptible to human error as it relies on the valuer’s personal experience and judgment.

What happens when the valuer gets it wrong?

If the body corporate is found to be under-insured in the event of a claim, the affected members of the body corporate will hold the trustees responsible for the shortfall amount. Depending on the extent of damage and under-insurance, the shortfall amount can easily run into the millions!
If the appointed valuer does not hold adequate professional indemnity insurance to cover the shortfall amount, the trustees will be held personally liable to compensate the financial loss. In such an event, the trustee liability policy might not come to the rescue if the insured amount is too low, or if your insurer refuses to pay on the grounds of “gross negligence”, for failing to practise due diligence when vetting prospective valuers.

How much professional indemnity cover must a valuer have?

Professional indemnity cover of R10 million does NOT offer adequate protection for trustees when considering that a substantial portion of this amount will first go towards covering the valuer’s defence costs and legal expenses before any amount is paid out to the body corporate. It is, therefore, recommended that the appointed valuer holds professional indemnity insurance for 10% of the assessed replacement value, but no less than R20 million.

Mirfin’s professional liability is backed by professional indemnity cover for R45 million per event. Why put yourself at risk, just to save the body corporate a few hundred rand?