Insurance news and information

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?

In short, probably not. Most general liability policies cover claims involving damage or injury caused by the insured during normal performance of the business. If you have purchased a condo association insurance policy, you have coverage for the buildings, commonly owned property, and liability covering the association. Any additional coverage is an added-on coverage option, and will be listed either on your addendum pages or sold as a stand-alone policy or policies.

So what should you have? Typical risks associated with condo association operations include:

- Property claims
- Liability claims
- Board member actions
- Employee actions
- Retirement issues
- Workers compensation
- Cyber liability
- Contractor liability for any remodels
- Floods, earthquakes, equipment breakdowns

While the general liability policy typically will cover property and liability claims, the rest of the risks are excluded, depending on your policy. However, associations are able to purchase supplemental coverage to lessen the exposures that these risks produce. Directors and officers coverage can diminish board-related risks, employee practices liability can address acts of your employees, and other policies can help to reduce your association’s risks for a reasonable price.

If you need a free review of your current coverage, call Emerson Poort at 877-201-3113 or click here to send an email. Emerson specializes in condo association coverage and can help put together a comprehensive package that fits your association’s needs.

Understanding your policy and gaps in your current coverage is the first step to preventing unnecessary, costly losses. Read through your policy today and call Emerson with any questions.