Flickr photo credit: .res

You as a condo association member understand that general liability – the foundation of your insurance program – covers only certain areas within and around the property buildings and grounds. What you may not understand is how your residents view your coverage. While it may seem a no-brainer to you that your insurance policy isn’t going to cover their personal claims, residents may not know this. Time for a little Insurance 101 for your residents.

In general, the condo or apartment association’s general liability policy will cover the following:

• All common areas of the condo association property
• The structure of the units, including roofs, outside walls, the buildings themselves (note: this does not include individual units, but rather the structure they are housed in) 
• The property’s common areas, such as the pool, tennis courts, exercise facilities, offices 
• Liability for injuries to people that occur in common areas

What your residents need to understand is where your policy coverage stops and where theirs needs to pick up. Most condo association insurance policies will exclude the interior of any unit, including fixtures, flooring, appliances, etc. It does not cover for injuries sustained by others inside the owner’s unit.

The master policy for your condo association could indeed pick up some of these otherwise owner-specific exposures depending on which policy you have. Two master package policies include:

• Bare Walls In: covers the building structure from roof to walls. The unit owners would be responsible for insuring the contents within their units. 
• All In: covers the building structure and interior elements of individual units, including any owner additions, fixtures, etc.

It’s best to go over your policy with a broker who specializes in condo association insurance coverage to determine which policy you have and how much your residents are liable for.

Armed with the specifics, you can then inform your residents of the limits of your condo association insurance coverage. While it’s not advisable for you to become insurance advisors, it’s always good practice to help residents understand what the association will be responsible for and where that responsibility ends.

Flickr photo credit: AchimH

Where are the Gaps?

 Your association’s property coverage came from a company in another state.

Your policy covering association vehicles – yet another company and carrier.

While these policies may very well cover all your needs, having them scattered among various providers could in fact be masking some serious coverage gaps.

 Suppose you have an apartment association insurance liability policy with Insurer A. That policy covers all your liabilities except for coverage for business risks associated with economic loss due to flaws in the insured’s work or product, an exclusion that may not be covered under a more specific policy because Insurer B may not know about Insurer A’s exclusion. 

And are you covered for pollution claims that are a result of a fire? Furthermore, does that same general liability policy cover acts of sexual harassment or assault? Most likely not, but does your broker or insurer know enough about you to recommend a separate professional liability policy?

If you obtain a construction policy from Insurer C, is that policy’s exclusion of bodily injury claims due to construction defects going to be covered on another policy?

 Consolidating all your policies under one common broker or insurance company can benefit you in a number of ways.

 • Your broker or insurance company agent understands your current coverage, as well as any coverage exclusions.
• All of your risks are addressed and there’s less chance of a costly gap in coverage occurring. 
• Bringing several policies under one carrier can save money with multi-policy discounts.
• Getting an association insurance package from one source means coverage is more complete and any gaps are more easily identified.

 To understand the benefits of bundling your coverage, call Emerson Poort at 877-201-3113 or email him by clicking here . An expert in condo and apartment association coverage, Emerson can help you identify gaps in your current coverage and consolidate your coverage to prevent loss exposure and potentially save you money.