Properly Cover Your Homeowners and Condo Association Loss Exposures

Many people are active in their condominium or home owners’ association, serving as directors, officers, and editors of association newsletters. If you are an active member of your association, consider the following risk management tips and recommendations.

Verify that the association has directors and officers (D&O) coverage in force with reasonably high limits. If the association refuses or chooses not to obtain D&O coverage, seriously reconsider your leadership activities within the group due to your unprotected liability exposure.
If D&O coverage is in place, verify that this policy provides errors and omissions coverage for the proper purchase of insurance. To do this, verify that the “failure to maintain insurance” exclusion is not attached to the D&O policy.
Ask your association to hire an independent insurance consultant to audit the association insurance program to uncover any potentially lethal coverage gaps. For example, home owners’ associations should have at least the following types of coverages: guaranteed replacement cost property coverage for common areas, commercial umbrella coverage, workers compensation insurance (even if there are no association employees) to cover claims brought by uninsured independent contractors, and D&O liability coverage.
If you don’t already have it, consider adding a personal injury (HO 24 82) or related endorsement to your homeowners policy.