SYDNEY MUNICIPAL FIRE INSURANCE

Evening Star, Issue 17968, 15 May 1922, Page 6

SYDNEY MUNICIPAL FIRE INSURANCE

riie Sydney City Council, the Labor domination of which lias lately ceased, has awakened to the insecurity of the position in which it had placed itself by the discontinuance of lire insurance in the usual manner, accompanied by the establishment of a .so-called insurance fund. The scheme was referred to in the ‘ Record ’ for March, 1920,. and February, 1921, and i' 3 chief feature was that a sum of £IO,OOO nei annum should be set aside in addition to the amount previously paid in fire insurance premiums—about £5,000 per annum. In adopting j)tis scheme the City Council entertained the hope that sutticmnt funds would be accumulated at the mid of five years to meet a fairly substantial loss. Obviously the fulfilment of such nil expectation would depend upon luck, with no assurance that luck would be propitious.

Hie subject was placed before the Citv Council afresh on 29th Alarcli by the Lord Afayor in a minute which .summarised tho present position, and pointed to the urgent need for a change in the scheme adopted. It appears that the. fund now amounts to about £47,000. and that the total value of tire properties to he covered is £2.500,000. A point which deserves attention is that, prior to tho departure made in 1920 by the adoption of the scheme, it seems to have been the practice of Ilia council for about a quarter of a Century, when insuring its property, to Value the buildings for the purpose of insurance at an amount considerably’ below their true values, probably’ on the ground that the risk of destruction by fire on some of the buildings was very remote, Tho Lord Afuvor'sminute states:

Mo know of the destruction of St. Mary’s Cathedral and the Alontreal Town Hall, (ho risk in both these cases being probably about the same as in the case - of the Town Hall and some other of our properties. Quite outside of the question of insuring at the full value, it must lie very apparent fo the committee that tho risk the City Council is taking at the present time in having £2,600,000 worth of its properties insured in a fund amounting to only £47,000 is not only very great, but is one that cannot be justified. The establishment of tho City Council’s own insurance fund is a. very excellent one, and as the fund increases so the insurances with outside companies can be diminished; but I do not think it was ever contemplated that the City Council should take upon itself the- responsibility of tho present position.

'Hie City Council, at the meeting in question, decided in favor of obtaining an immediate cover. From the explanations given it appears that the estimated premium required to bo set aside For the in.surunco ol Ebc rouneiT.s uiry properties, apart from the electric light .installation, would be £2.500 per annum. At the same time, the item of £IO,OOO in the estimates for 1922 as the yearly contribution of the insurance fund was passed without, discussion.

During the discussion on the main question some pointed remarks were made, and those by Alderman Brooks deserve attention. He said, as reported, that it. was really criminal to think that the powerhouse ami other electric lighting property, on which they had borrowed public moneys, were, not covered by anv insurance save this paltry reserve of £47,000. Should there, be a serious lire, (he ratepayers would have to make good the losses, and that would cripple the city. If a board of directors acted (bus in regard to the property of shareholders, and if there was a lire, and the directors were unable to replace the damaged properly, they would probably find themselves in gaol, for criminal negligence. The responsibility of the aldermen in regard to the enormous property owned bv tho City Council whs really lh;it of trustees.— Australasian Insurance and Hanldnrr Hecord/ April 21, 1922.