Condominium Associations provide hazard and liability insurance as part of the condo owners monthly dues. The policy covers common areas and shared features such as the roof, exterior structure and boiler room as well as amenities like the pool and sports courts.
When you buy insurance for a condominium association, there are a number of coverages that you should buy. Some of the most common (and important) types of coverage include:
- Fidelity Liability: This covers the costs of embezzlement or theft of money from the association by a board member.
- Worker’s Comp insurance: This is just in case a volunteer gets injured while working on behalf of the association.
- Bare walls coverage: As the name implies, this cover is for the basic building structure. This includes walls, floors, roof and elevator/s.
- Single entity coverage: This covers individual unit finishes except for the owner’s personal property. This coverage doesn’t include refurbishments on said finishes. The unit owner is responsible for improvements to countertops, floors or light fixtures within the unit.
- General liability insurance: This is one of the most important coverage to include in a condo association policy. That’s because it covers the cost of lawsuits that may happen because of accidents that occur within the building. For instance, someone might slip and fall while doing repairs on the property. The association can also be sued for issues like failure to provide adequate security thus placing owners at risk of burglary or attack.
- Director’s and Officer’s Liability insurance: Did you know that members of the condo board can be sued or held liable for missteps in decision making? It doesn’t seem fair because they’re just volunteering and doing their best for the community. Unfortunately, this doesn’t exempt them from liability. For instance, if the board puts in a new sidewalk and omits a compulsory hand railing, someone could hurt themselves and sue the condo association. As part of the decision-making committee, each board member will face personal liability in the lawsuit. The good news is there are coverages for such scenarios. There’s a Directors and Officers Liability insurance which protects all board members in case they make certain mistakes.
- There’s also Personal Property Coverage for personal property of the association. It’s important to understand what’s covered in your association’s master insurance policy. That way, you won’t pay for items the association has already covered. That takes us to our next section which deals with some of the most important insurance coverages to consider as a unit owner.
Our commercial lines agents specialize in condominiums so they’re familiar with the condo property act and other regulations, as well as the claims process as condominiums have a unique claims process. They can also provide you with risk management guidelines as to what activities the board could do to reduce the risk of a loss. It’s important to be proactive when selecting an insurance policy. If you think you may need condo association insurance, give us a call or request a quote on our website.