Because legally the committee and members would be personally liable for any damages awarded against the association for injury to the public or property damage caused by the “negligence” of the association.
It is a complex legal concept but essentially it means that as a result of the failure to take reasonable care in the running of some activity people were injured or property was damaged. Whether or not there has been negligence often has to be left to a court to decide.
Accidents occur in the most simple of circumstances. A person, perhaps child, is scalded by tea or injured by a stone from a lawnmower or strimmer or any number of unexpected causes.
Hopefully no claim will ever be made against your residents association but it could and does happen that claims are made against voluntary organisations. The prospect of your residents association having to deal with an uninsured claim is just too dreadful to contemplate. Whereas the association, which has Public Liability insurance, can just pass the matter to it’s insurance company to handle.
Remember also that the insurance of the hall or hotel where your association organise meetings / events will not cover claims arising out of the negligence of the association. The same goes for the bouncing castle hire company who claim, “they are fully insured”.
Usually the residents association is responsible for the supervision of the bouncing castle while children are using it and the hire company insurance would not cover the liability of the association.
Absolutely not but they need to satisfy themselves that the association has adequate Public Liability insurance and that it is renewed without fail and on time year in year out.