No one likes to admit lack of knowledge. But condo and apartment association boards are generally made up of volunteers – good Samaritans who want to help out the community. And that’s the problem – a good portion of condo association board members have no head for business. And this could put your association at greater risk of loss.
As a nonprofit entity, your condo, homeowner, community or apartment association must meet relevant state laws. What’s more, association board members who aren’t often familiar with the legalese of association practice may not understand the bylaws, covenants, or other legal documents that the association has adopted. Worse, if your board has no standing experience with writing, amending, or interpreting your bylaws, any move by the board could open your association up to legal entanglements.
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Flickr photo credit: Radio Rover
[technorati code wdzjeyt7n4] Are your work-at-home unit owners creating an insurance gap for your association? What seems like an innocuous issue could be a major deal breaker for your insurer. That’s because most policies state that units are for residential purposes only. Some go so far as to prohibit business operations of any kind in the units. Tell that to the freelance writer or the Internet auctioneer living on association property.
As home-based businesses grow in number, there will be more people working from home. As a result, insurance policies will be challenged should any claims arise as a direct result of the home-based business. You as condo association members must determine the extent to which you will address a telecommuting unit owner. In most cases, insurers expect condo associations to exercise good business judgment.
For instance, not all home-based businesses pose a risk to the condo association insurance coverage. Condo associations should ask the following: How big is the risk based on the unit owner’s business? Are clients visiting the property? Is there a nuisance factor, such as excess noise, traffic, deliveries, or late-night phone calls/faxes that may be heard in other units? Is the unit owner manufacturing items in the unit? Read more…
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? 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…
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