Providers of Australia’s 800-plus flexible workspaces have been warned to act on unexpected public liability risk.

Tenants often fail to secure their own insurance, even though it is a condition of membership, ABC Insurance underwriting manager Kyran Bloomfield says.  

Some even cancel policies within cooling off periods but still use the documentation.

Mr Bloomfield has created group product Members Protect to tackle the issue. It covers workspace members under a single policy, ensuring comprehensive protection at a lower cost than individual policies.  

He told insuranceNEWS.com.au he had the idea while at co-working space Fishburners in Sydney. 

“I was working in one of the flexible workspaces and it became apparent quite quickly that a lot of people didn’t have policies in place. It’s an issue basically across the board. 

"Even if you’ve got really good checks in place, it still doesn't guarantee people are actually doing what they say – it’s deeply flawed because people can cancel the policy afterwards and just keep hold of the certificate. 

“I thought it would be beneficial to flip it on its head and just have it as part of the overall [membership] offering. It’s not been done before in this sort of space, whereby the flexible workspaces themselves can actually control a level of cover for their members.” 

Risks include faulty wiring or trip hazards. Claims could also arise from accidents such as a client slipping on a wet floor, or even property damage. 

“Obviously, it’s a public liability risk – sharing kitchens and hot desking. You have people’s bags, or someone will spill a coffee or a drink, or apparently in one case someone put a knife in a dishwasher blade up and somebody slit their arm on it,” Mr Bloomfield said. 

Cover commonly taken out by providers generally only insures their own negligence.  

If there is an incident and the tenant does not have insurance in place, it can “reflect back on the flexible workspace” for not enforcing rules, and lead to their insurance becoming invalid. 

Members Protect lets workspace providers buy suitable public liability insurance for members that cannot be cancelled without their knowledge. 

“This is a solution to ensure everyone does have that office liability cover,” Mr Bloomfield said.