Condo associations are responsible for maintaining the property and managing the finances of its membership. A proactive approach to risk management is an essential element of achieving both of these important duties. Condo board members and the property management companies that work with them need to carefully evaluate how to safeguard their condo buildings’ assets.
General Liability Insurance
Condo insurance coverage must include a general liability policy. General liability will protect the association in the event that someone makes a claim against it.
It is imperative that condo buildings maintain adequate property insurance. A condo’s property insurance policy will generally not cover claims relating to an individual resident’s unit but rather only the common area elements of the building.
Directors and Officers Insurance
The individuals who serve on a condo board should have a directors and officers policy that offers coverage if there is a legal claim made against them relating to their service on the board. This vital policy can help to protect board members from personal liability in legal action.
Ultimately, board members should familiarize themselves with their condo’s insurance. Working with a knowledgeable insurance representative who is experienced in serving condos can help to review current coverage levels and identify any gaps in existing policies.