Flickr photo credit: turbojoe_(away)
If you’re watching your condo association insurance costs these days, you’ve seen the trend. Insurers are passing on higher and higher deductibles to associations – sometimes to the tune of $10,000. And associations are having difficulty adjusting to the higher costs. In fact, associations facing mounting deductibles are often looking for places to transfer that cost. That means some unit owners are now coughing up extra for the additional deductible amounts in the form of higher association fees.
It stands to reason that associations would choose to pass the additional cost on to the owners. Most associations now include insurance costs in association fees. Because much of the liability stems from owner activity, associations feel justified in including the deductible charges in association fees. But some associations are considering passing that cost on only to those owners who receive the insurance benefits paid for by the premiums. While that’s a more just way of handling the situation, it’s unlikely that a smaller group of owners would be able to take on the deductible. Also, the association may have to go through the expensive legal process of assigning negligence to the owners, which may not be successful. Read more…
Flickr Photo Credit: MeijerGardens
It takes just a cursory glance at the news to realize that many organizations have been victims of crime perpetrated by their employees or board members. Tales of treasurers absconding with funds, board members accused of bid rigging, or groundskeepers pilfering equipment abound. There are also numerous incidents of residents, property visitors, or neighbors causing damage or stealing property. There’s no excuse – condo and homeowner associations need crime coverage.
While typically associations purchase fidelity bonds – coverage that responds to employee embezzlement, forgery, or theft – this coverage does not respond to the acts of outsiders not covered specifically under the bond. Also not covered is theft of a client’s property while in the association’s “care, custody, or control.” So if association fees paid are stolen by an outsider from the company vault, fidelity bonds will not respond. Read more…
Flickr photo credit: michel_langendijk
Forming your condo association is a system. You set up the board, the office, and you purchase general liability/property coverage and you are ready for business, right? Wrong.
What most condo association clients don’t recognize is that the general liability policy does not cover every risk.
In fact, general liability covers the bare minimum of risks that could befall a business.
So how do you know whether the condo association coverage you have is adequate? First, look at the declarations page of your policy. What kinds of coverages are listed? Note also how those coverages answer your specific needs. For instance, your general liability policy may cover damage or theft, but does it cover accident or injury caused by employee negligence? Does that policy cover wrongdoing of a board member or members that cause residents or employees monetary or physical loss? If your accounting clerk commits fraud, will it be covered? Read more…
Flickr photo credit: beancounter
Ten Business Insurance Renewal Reminders – “Let Us Know”
To insure a Home Owner or Condo Association is to worry – if you’re worried about whether or not something may need to be covered, let us know.
1. Read your policies, paying attention to the limits, conditions, and exclusions. If you have questions or concerns, let us know.
2. Liability limits can be increased – if you’re concerned, let us know.
3. Commercial General Liability (even with an Umbrella) doesn’t cover all types of claims. If you’d like to discuss Employment Practices Liability, Directors & Officers Liability, Fiduciary (ERISA) Liability, Professional Liability, International Liability, Cyber-Liability or other types of protection, let us know.
4. Selecting adequate Property insurance limits is your responsibility – if you underinsure, there can be coinsurance penalties and/or you’ll come up short after a serious loss. Replacement Cost requirements have nothing to do with Market Value or Book Value – what would your building(s) and contents cost to replace, brand new, if destroyed? Read more…
Photo courtesy of flickr - Last NYC Hero
Homeowner associations are under constant pressure to keep costs down. With the natural disasters that have occurred in the past year or so, the pressure is growing as insurance costs increase and are easily the largest expense in the budget.
Many Condominium and other community associations have considered self-insurance as an option. Self-insurance can reduce an associations’ premium by 20-40%. As good as that sounds, self-insurance should be fully investigated before jumping in.
What is self-insurance?
In a very loose interpretation, self-insurance is a typical property/casualty policy with an extremely high deductible in which the association is responsible for paying claims less than the deductible. State regulations to self insure Condominium, Cooperatives, Homeowners’, and Timeshare associations vary and must be carefully reviewed for your particular state and circumstance.
Those in favor of self-insurance feel that in their particular case the possiblility of a major catastrophe affecting all members of the plan is so remote and unlikely that the benefits outweigh the risks.
Those against self-insurance think that should a catastrophic event occur they would be financially unable to pay the claims in the instance of full replacement coverage.
If you think self-insurance is something to look into, contact an independent agent with access to multiple markets who specializes in insurance for community associations.
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