Consider These Important Condominium Association Insurance Coverages
Condominium associations face the same problems as homeowners do. They must make changes to their buildings to make them more comfortable or improve their legal rights. They must also protect their assets against possible lawsuits. However, they are governed by different rules than homeowners. While there are many similarities, there are also many differences. The primary difference between homeowners and condo associations is that condominiums have common areas that require coverage. In this post, you will learn about some essential insurance policies that you will need and some optional ones.
When Insuring Condominiums, What Challenges Are Faced?
A condominium association is a legal entity that allows unit owners to own property within a building, which a corporation owns. Managing the condominium's finances and day-to-day operations is the board's responsibility. These associations face some challenges when it comes to insurance. Nonetheless, most of these can be mitigated when choosing a specialist insurance company that deals in this coverage. This condominium association insurance applies to only the common areas in the building. In addition to property coverage, it includes liability coverage as well. Additionally, swimming pools, playgrounds, parking lots, and other facilities present numerous liability risks.
What Coverage do these Associations Need?
To be fully protected against lawsuits, condominiums need both business and homeowner insurances. Some essential options include:
General Liability
You can use condominium General Liability Insurance to provide coverage for the owner and guests on the property. You can also use it to cover legal expenses relating to any lawsuit or claim filed against the condominium association, the property owner, residents, tenants, or guests.
Building Insurance
Condominium insurance policies provide coverage for the building and assets. It covers all common areas within the condo complex.
Business Personal Property
Business Personal Property Insurance is an insurance policy that covers communal belongings (artwork, seating, etc.) from being lost, stolen, or damaged.
Commercial Umbrella Insurance
Commercial Umbrella insurance is an insurance policy that protects in case of accidental or intentional damage to the condo premises. It covers you for damages to the property, coverage in the event of lost income, medical expenses, and funeral costs in the event of death or injury.
Directors and Officers
In general, Directors and Officers (D&O) insurance is liability insurance that protects the person or organization from potential legal liabilities stemming from their fiduciary activities of being a company director. With many different types of directors, such as executive officers and more, having various responsibilities and fiduciary duties, D&O insurance protects those who have to perform these duties.
Optional Insurances Your Association Might Want To Consider
Depending on the situation of the complex, some additional options may prove helpful in addition to those listed above.
Flood Insurance
The need for condo flood insurance policies has increased with the increased population and development in coastal areas.
Sewer and Drain Backup insurance
Condo owners are faced with potential risks such as water damage due to sewer backups that can occur during extreme weather events or other cases where pipes break or burst at unexpected times. This insurance covers the building if this event occurs.
The cost of condo insurance should be considered an investment in the future of your property. While some are required by law, others are optional. Nonetheless, you should seriously consider getting as much coverage as you can afford to cover all eventualities.
