Associations – All Risk or Broad Form – Which Are You?
Having an apartment or condo association insurance policy isn’t a guarantee that your association is covered should an event occur. It’s a guarantee that you have some type of coverage. And between the two forms of association insurance coverage, the differences are great.
All risk coverage typically covers your association from all perils. There are exclusions, such as earthquakes, acts of war, or terrorism, but the policy covers most events that can befall your property. In fact, the standard all risks policy spells out coverage exclusions rather than listing every covered event. If it’s not excluded, it’s covered.
Broad form coverage covers losses resulting from a wide variety of events, some listed on policy endorsements or in policy language. Typical broad form coverage includes damage from fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, or volcanic action, plus falling objects, ice, sleet or snow weight, and accidental water damage.
What’s the difference? Broad form insures only those perils listed. All risk insures all those perils not excluded. All risk insurance coverage is often called “special” form. In general, an all risk policy offers associations much more coverage than a broad form policy.
Which coverage type is right for you? If your current association insurance broker is writing broad form, ask about the all risk coverage. Also, ask why the broker has opted for broad form over the all risk policy. It could be that your association is not exposed to as many risks as those requiring an all risk policy.
If you’re unsure about whether your association needs all risk or broad form, contact me. I can help you examine your association practices and property needs to determine which type of policy will work best for your association.
Flickr photo credit: Fatty Tuna
I am Chairman of the Budget, Finance and Insurance Committee of an 11 year-old 36 Unit
Patio Home Assocoation in Westminster, CO. Presently, we carry a property, general liability, association director and officer profesional liability, and fidelity policy. Each
resident owner must carry their own home-owners policy. Additionally, we have some protection by a fidelity policy carried by our HOA manager. Recently, questions concerning
the exposure to risk associated with activities authorized by the Executive Board and/or the Architectual Compliance Committee which result in personal injury and proprerty damage that may not be covered by our existing insurance coverage.