The Legislative Council passed a resolution to amend the Building Management (3rd Party Risks Insurance) Regulation moved by the Secretary for Home Affairs today.

The Building Management Ordinance's new section 28 requires all owners' corporations to procure and keep in force a third party risks insurance policy for the building's common parts. The newly-passed regulation sets out the detailed requirements for the corporations to procure third party risks insurance.

The Home Affairs Department will make the requirement for compulsory insurance for all owners' corporations effective on January 1, 2009.

The department said while owners' corporations may manage and maintain their buildings properly, accidents can still occur in the common areas causing injuries or deaths. Civil liability could be financially heavy.

It strongly advises all owners' corporations which have yet to get insurance to do so as quickly as possible to ensure better protection of owners' interests and the third parties concerned.

Under the regulation, the minimum insured amount of each policy will be no less than $10 million per event.

As unauthorised building works are illegal, and should be removed as a matter of priority, the regulation does not mandate an owners' corporation to take out a third party risks insurance policy to cover any legal liability arising out of illegal building works.

The resolution will be gazetted on November 9. The regulation can be downloaded from here.