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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Much has been written about condo and apartment association insurance versus insurance carried by condo / apartment unit owners. The two main types of coverage offered to condo associations are:
1) Bare Walls In – policies covering all real property from the exterior framing inward, excluding fixtures or other installations within the unit.
2) All In – policies covering all fixtures, installations, or additions within the interior surfaces of the individual units.
Obviously the best one for your unit owners would be the All In condo association insurance policy, which would limit the need for owners to purchase additional coverage. Condo associations buying Bare Walls In coverage leave a bit more loss exposure for their unit owners. Most condo associations will advise unit owners on which policy is covering the premises. But what about deductibles? 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…
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