Community association insurance has become simpler over the years as the major carriers and agents have ironed out most of the problems that come with having an association insure one part of a property and the individual homeowners pick up the rest. It used to be the main point of essential education to avoid overlapping coverage, and more importantly, coverage gaps. It seems that the problems these days center around the major carriers willingness to offer coverage at all. Too many have dropped out of the market entirely. They just don’t want to bother with community associations, especially those high profile oceanfront associations that need it the most.
The issues to be understood today would focus around umbrella coverage and Directors & Officers Liability (D&O) insurance. It’s still astounding to me to see how many boards do not have adequate D&O coverage. There you are, unpaid volunteers giving hundreds of hours for the good of your community, facing the slings and arrows of outrageous homeowners along with potential lawsuits for what could be breach of fiduciary responsibility, and you don’t get adequate insurance coverage for yourselves. You try to pinch the insurance penny in the one area that will hurt you personally. Isn’t it enough that you donate your personal time? Why expose yourself to the costs of defending against a frivolous lawsuit brought by that nut in unit 317? If you take the time to really understand just one part of your overall responsibilities, make it the D&O policy.
An important adjunct to D&O is additional umbrella coverage. It is very inexpensive and provides the community the total protection it requires.
Selecting an agent has also become much simpler. Over the years there have been a small handful of individuals in each market that have taken community association insurance as their major focus and have learned through experience how to deal with the carriers as well as the clients. I suggest you listen to your property manager’s advice and look at the track record of the agent. Most of the strong players have 15-20 years experience in this field. Don’t settle for anything less. You don’t want to have to make claims against your agent’s Errors & Omissions policy, though you might ask if they have one.
D&O coverage and umbrella coverage: learn about these two aspects of insurance and you’ll have the major bases covered. There’s plenty to learn for the new board member in regard to the “normal” coverage areas, but your agent should be able to walk you through the questions and answers. Most of them are accustomed to attending board meetings. Some even bring the donuts.
The issues to be understood today would focus around umbrella coverage and Directors & Officers Liability (D&O) insurance. It’s still astounding to me to see how many boards do not have adequate D&O coverage. There you are, unpaid volunteers giving hundreds of hours for the good of your community, facing the slings and arrows of outrageous homeowners along with potential lawsuits for what could be breach of fiduciary responsibility, and you don’t get adequate insurance coverage for yourselves. You try to pinch the insurance penny in the one area that will hurt you personally. Isn’t it enough that you donate your personal time? Why expose yourself to the costs of defending against a frivolous lawsuit brought by that nut in unit 317? If you take the time to really understand just one part of your overall responsibilities, make it the D&O policy.
An important adjunct to D&O is additional umbrella coverage. It is very inexpensive and provides the community the total protection it requires.
Selecting an agent has also become much simpler. Over the years there have been a small handful of individuals in each market that have taken community association insurance as their major focus and have learned through experience how to deal with the carriers as well as the clients. I suggest you listen to your property manager’s advice and look at the track record of the agent. Most of the strong players have 15-20 years experience in this field. Don’t settle for anything less. You don’t want to have to make claims against your agent’s Errors & Omissions policy, though you might ask if they have one.
D&O coverage and umbrella coverage: learn about these two aspects of insurance and you’ll have the major bases covered. There’s plenty to learn for the new board member in regard to the “normal” coverage areas, but your agent should be able to walk you through the questions and answers. Most of them are accustomed to attending board meetings. Some even bring the donuts.
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