condo association insurance is a broad insurance policy that involves a wide range of coverages. A condo association’s insurance policy typically helps cover the structure of the building and common areas while providing common insurance policies found in similar types of properties. It’s important to understand what a condo association’s policy covers and how that differs from a condo owner’s insurance policy.
To start, there are a few different important aspects of the policy to understand. The liability protection in a condo association’s insurance policy may help cover legal or medical costs if the association is ever hit with a lawsuit. One example of a situation you would need liability protection for is if someone were to be injured after slipping and falling in a common area that is maintained by your association.
Additionally, there is property coverage which helps provide protection against the common areas of the building that you share with all the other residents. These common areas include the roof, elevator, basement, courtyards, and walkways.
In some cases, the association’s insurance may help protect the infrastructure of your condo. You would then be responsible for covering things like kitchen cabinets, appliances, bathroom fixtures, and any plumbing and wiring in your unit with your own insurance policy.
Other times, the association’s coverage may help protect your condo as it was built, including fixtures such as the original tub and appliances. In this case, you would likely be responsible for the cost of replacing any upgrades in your unit.
What Does Condo Association Insurance Cover?
A condo owner’s insurance policy may include the following coverages:
Additional living expenses if you’re the victim of a fire or another disaster covered by your policy. (This coverage is usually available only if the covered loss makes your condo unfit for living.)
General Liability Protection
General liability insurance helps to protect you if you’re sued or if you are found at fault after someone has an accident in your unit. It covers for bodily injury, property damage, and other general damages and risks. This is a portion of nearly every condominium association insurance policy.
Directors and Officers Liability Insurance
D&O liability protects the members of the board if they are sued as a result of decisions that they make as board members. Common causes of claims include selective enforcement of various rules as well as the failure to follow the proper procedure with respect to meetings and budget expenditures.
Fidelity Bond or Employee Dishonesty
Fidelity bond or employee dishonesty policies protect you from employees’ wrongdoing while they are working for your condo association. This covers stolen goods, dishonesty regarding hours and time off, and other forms of employee fidelity. Some states require this policy while others don’t, but it is a highly recommended policy to have in most cases.
Worker’s Compensation
Workers comp is needed in case a volunteer or worker is injured while working on behalf of the association. This can be a very expensive financial loss if you are not covered, as medical bills can be very expensive.
Single Entity Coverage
This covers individual unit finishes except for the owner’s personal property. This coverage doesn’t include refurbishments on finishes of personal property, however. The unit owner is responsible for improvements to countertops, floors, or light fixtures within the property.
You may also want to ask about what other coverages your policy may include. For instance, you may want to consider loss assessment coverage, which may reimburse you for your portion of a bill split among all condo owners for a covered loss, such as a fire in your building’s lobby.
Additionally, condo association insurance has unique insurance needs compared to condo owner’s insurance due to the needs of a group of leaders, which is why it requires policies such as D&O and employee fidelity.
So, while you may not be shoveling the driveway or mowing the lawn as a condo owner, you still want to take the right steps to protect yourself and your investment. Don’t wait until it’s too late, or you could end up experiencing some bad luck and realize that you are not covered when you need to be!
Reach Out To JMG
JMG Insurance Corp has been servicing the insurance needs of the Fairfield County area since 1916. They thrive on the trust that their clients place in them, and they hope to build long-lasting professional relationships with each one.