Some of your dues go toward paying for our community’s insurance needs. Have you ever wondered what kinds of insurance our community association needs? Below is a list of the different types of insurance typically available to associations.
Our association doesn’t have all of these types of coverage; but they’re available if we need them. The board and manager work closely with the association’s insurance professional who is familiar with our unique needs.
Property insurance. Most other types of coverage are built around property insurance. It covers all buildings, structures, and personal property owned by the association, including common property, parks, woods, open spaces, and recreational facilities, and sometimes includes portions of residential areas.
General liability. In addition to protecting physical property, our association has commercial liability insurance. Unlike property damage, which often can be measured in dollar amounts, liability claims have no limits other than those imposed by courts.
Auto (owned, non-owned, and hired). Associations with employees who drive cars, trucks, or maintenance vehicles on association property or elsewhere while carrying out association business need auto insurance.
Directors’ and officers’ liability. Boards are volunteers trying to serve their communities, but as the old adage says, “No good deed goes unpunished.” So, even when boards behave appropriately and use sound judgment someone may still file a lawsuit claiming wrongful termination, sexual harassment, discrimination, or mismanagement of funds, to name a few common suits.
Umbrella liability. This type of coverage closes some of the gaps in other types of insurance policies. No standard umbrella policy exists, so the association works closely with our insurance professional to design a policy tailored to our specific needs.
Workers’ compensation. This insurance—required in most states—provides benefits for employees who sustain injuries while working for the association.
Terrorism. Insurance companies are now required by law to offer coverage for certified acts of terrorism. An “act of terrorism” is usually defined as any violent act that is dangerous to life or property with the intention of affecting the population’s conduct, with damage totaling at least $5 million.
Mold. Damage from mold is excluded from most standard property insurance policies, which tend to provide coverage for damages that are sudden and accidental but don’t generally cover the cost of cleaning and maintaining a home.