The Insurance Needs of Condo Associations

Condominium complexes usually have their own sets of rules, and often their own associations for owners. According to the Community Associations Institute, approximately 69 million Americans live in some type of community association; including condo associations, which represent between 42 and 45 percent of the total association residents. Condo associations play an important role in the lives of members, especially when it comes to ensuring the financial stability of the community. Not only is a condo association responsible for the appearance and well being of the community it serves, it also bears the burden of many, if not all, of the risks.

Regulations for condo associations can vary by state, city, or even from association to association, so a general insurance plan can’t meet all of the needs a community might have. Below is a list of some of the most important insurance policies that condo associations should consider in addition to their general insurance policy:

  • Comprehensive General Liability: This policy protects from general liability claims that aren’t otherwise covered in the association’s general insurance policy. It typically provides coverage for bodily injury and property damage sustained by others at your premises or as a result of your operations. This can even include off-site locations where an association-sponsored event is being held.
  • Discrimination Coverage: When a resident enters the foreclosure process, either due to nonpayment or some other reason, they may try to point the blame at the association. Discrimination Coverage helps protect an association from evicted parties claiming they are being discriminated against because of class, race, religion, etc.
  • Equipment Breakdown Coverage: Also known as boiler and machinery insurance, this helps protect against financial loss from property damage resulting from a sudden and accidental mechanical breakdown. It’s typically used to supplement a property insurance policy, and can be written to cover one specific type of equipment or be more of a blanket coverage for all equipment.
  • Workers’ Compensation Coverage: The association is liable for any injury resulting from association duties, so workers’ compensation is essential for covering any injury claims that may arise.
  • Directors and Officers Liability: This type of coverage, also known as D&O, specifically covers the directors and officers from personal liability in the event there are any claims made against the association for alleged wrongful acts, such as misappropriation of funds, paperwork errors, etc. (This does not cover willful wrongdoings.)
  • Employee Dishonesty Coverage (Fidelity Insurance): Similar to the above coverage, if an employee/volunteer does commit a willful wrongdoing, such as theft, fraud, or embezzlement, this coverage would help the association with the resulting loss.

Nearly every action an association executes can be a source of liability for the community, so it’s important for insurance agents to have a clear idea of any and all risks to ensure they can provide a condo associations insurance policy that best aligns with the association’s needs.


About American Team Managers Insurance Services

Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (877) 671-7503 to speak to a representative.