Condominium associations typically own and are responsible for insuring the common areas and structures, including exterior walls, roofs, hallways, and elevators. Furthermore, the master policy typically insures the interior of the Units, as dictated by state law and your governing documents (indentures, declarations, CC&Rs, etc.). It’s critical that your master property policy meets not only these standards, but also ensures that Unit Owners will be able to secure a loan from most major lenders.

General liability insurance protects condominium associations against claims of bodily injury or property damage occurring on common property. This coverage is vital in mitigating financial losses from lawsuits, including legal defense costs and settlements. Evaluate the need for additional liability coverage, such as umbrella insurance, to provide additional protection beyond the limits of primary policies, especially for associations with high-risk amenities or extensive common areas.

D&O insurance protects board members and officers from personal financial losses resulting from alleged wrongful acts or decisions made in their official capacities. This coverage is crucial in safeguarding the personal assets of volunteers serving on the board. There is wide variation between D&O policies, and it’s critical that your association has broad coverage that picks up a variety of claims—from non-monetary damages to third-party discrimination.

This coverage safeguards associations against financial losses resulting from fraudulent or dishonest acts committed by employees, board members, volunteers, and managers while handling association funds. Please note that most governing documents require this coverage, and nearly all lenders mandate that associations carry a crime limit no less than three months’ of dues, plus the total amount in your reserve accounts.

Worker’s compensation insurance will provide coverage for employees of the association as well as potentially protect against workplace injuries, financial support, and medical expense coverage in the event of an occurrence involving an employee or a contractor carrying inadequate or no worker’s compensation insurance. Even if you have no employees, the association may also consider implementing an “if any” type of policy to cover the acts of association volunteers and uninsured subcontractors.

While the association’s master policy typically covers common areas and building structures, individual unit owners are responsible for insuring portions of their unit’s interior, personal property, and liability exposures. The HO-6 policy also should provide adequate loss assessment coverage for losses to the common elements that either fall under the association’s master deductible or are not covered by the master policy. Our team assists associations with coordinating coverage between the association’s master policies and the unit owners’ policies.