Tuesday, December 18, 2012

Association Insurance 101

Every Community Association - no matter how big or small - must maintain an extensive insurance policy to protect their property, their assets, their employees, and, most importantly themselves.  Whether you’re part of a homeowner association, property owner association, townhome association, condominium association, or office complex association it is very important to make sure you are fully covered and protected.

When thinking of insurance for Associations, more than likely, the first thing that comes to mind is coverage to protect the "common areas" that are the responsibility of the Association.  In a homeowner or property owner Association this may include the amenities such as pools, tennis courts, clubhouses, etc.  With townhomes or condo communities, it may be a little more extensive, when contemplating the building(s) themselves, roofs, parking lots, amenity areas, etc. 

It is crucial that these things be contemplated and included in the Association’s insurance policy.  In the event of a large loss, the policy should provide coverage for a potential rebuild/repair, keeping homeowners from having to dig into their own pockets.  What many Association members do not realize is that there are several other insurance coverages that an Association needs to both be aware of and carry.  These other coverages include: liability insurance, fidelity insurance, Directors and Officers insurance, workers compensation insurance, and financial insurance.

The importance of each of these coverages has been summed up below:  

  • Liability insurance protects the Association should there be any type of occurrence with a third party as it relates to the Association.  A good example of this coverage - someone slips and falls while on the Association’s property and then decides to sue the Association for recovery.
  • Fidelity insurance is sometimes also referred to as crime insurance.  This protects the Association in the event that its property or money is stolen.  At Access Management, we make sure that every property carries fidelity insurance, so that each Association is even more protected.
  • Directors and Officers insurance protects the volunteer Board members for their service on the Association's board . If a suit is brought against the Board or individual board members related to their service on the Board, this policy would step in, verifying that the Board was working in the best interest of the Community.
  • Worker’s Compensation insurance is insurance that Associations should have if they have vendors or contractors working directly for the Association, or if they have any homeowners doing volunteer work (such as putting up decorations).  This coverage also protects the Association should an employee get injured while working in the Community.  It’s also important to ensure any contractor that isn’t a direct employee of the Association, hold their own worker’s compensation policy.  This will limit the liability of the Association, since the contractor’s policy will step in should an employee get injured while on the job.
  • Finally, financial insurance is in place by the banks to protect your money.  FDIC or Federal Deposit Insurance Corporation guarantees the safety of the deposits within the Association’s bank account.  Access Management works only with banks that provide this FDIC insurance and are currently financially stable banking institutions.

Here at Access Management, we specialize in making sure our communities are fully aware of the insurance coverages that they need to have in place and work with only the best insurance agencies to provide these coverages.  If you’re a Board member for your Community or plan to be in the future, take the time to make sure your Association is fully protected.  You won’t regret that you did.


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