Budget season is a great time to review the association’s insurance coverage. Although comprehensive, quality insurance coverage can be a significant expense, it is typically far less expensive than paying out-of-pocket for the litigation expenses and/or damages incurred in the event of a loss. And, your association must carry at least the minimum coverage required by its governing documents, and, for condominium associations, as required by the Georgia Condominium Act.
Below is a “checklist” of the coverage that you should always maintain for the association:
Property. Provides financial reimbursement in the event of damage to covered property.
General Liability. Provides coverage for claims made for damages due to bodily injury or property damage caused by a covered occurrence.
Directors & Officers (a/k/a “D&O”). Provides coverages for lawsuits against the association and members of its board of directors arising out of the governance or management of the corporation. The coverage offered by D&O policies, in particular, can vary widely from insurer to insurer, and some insurers do not offer coverage for certain types of claims, such as non-monetary claims and discrimination claims, that commonly effect community associations. To make sure that your association’s D&O policy offers the most comprehensive coverage for claims likely to affect your association, we recommend obtaining a D&O policy tailored to community associations. Check with your experienced community association insurance agent and attorney for names of insurers that offer tailored community association policies.
Umbrella. Provides liability limits in excess of what is covered by the basic, underlying policy.
Crime. Provides coverage for the theft or loss of association funds by a board member, manager or other person that has control over the association’s funds.
Worker’s Compensation. Provides coverage for an injured employee, independent contractor or volunteer working on behalf of the association.
As always, we strongly recommend that you have an experienced insurance agent periodically review your association’s coverage. A list of insurance agencies that specialize in community associations is available on the CAI-Georgia Chapter website at: https://www.cai-georgia.org/