We read the association documents first, then align the master policy with what the association and unit owners are each responsible for insuring.
Five coverages, and one document that governs how the first one works.
Whether the master policy covers the units as originally built, all-in including fixtures and improvements, or bare walls only is determined by the governing documents. This single distinction decides who insures a kitchen after a burst pipe, and mismatches between bylaws and policy form are common.
Injuries in common areas — walkways, pools, lobbies, stairwells, parking. The association's most visible exposure and usually its most frequent claim.
Board members are volunteers making decisions about other people's money and property. Disputes over assessments, rule enforcement, elections, and maintenance decisions land here. Without D&O it is difficult to recruit anyone willing to serve.
Theft of association funds by a board member, employee, or property manager. Many state statutes and lender requirements set minimum fidelity limits tied to reserves, and coverage should extend to the management company handling the money.
When a loss exceeds the master policy, associations may assess unit owners. Owners can carry loss assessment coverage on their own policies, and boards do their members a service by telling them it exists and what limit to carry.
Boilers, elevators, and HVAC failures, plus ordinance-or-law coverage to rebuild older buildings to current code. Both are routinely underfunded in association programs.
Lenders, statutes, and bylaws each impose requirements worth reconciling.
Usually a document problem before it is an insurance problem.
Bylaws say all-in; the policy is written bare walls. Nobody discovers it until a pipe bursts and two carriers point at each other.
Buildings insured at a figure set years ago while construction costs moved. Coinsurance can then reduce even a partial-loss payment.
Boards exposed personally, or the association itself uncovered when it is named alongside the directors.
Limits that have not kept pace with growing reserves, and coverage that stops short of the management company actually holding the funds.
A large assessment after a major loss surprises members who could have carried inexpensive coverage for exactly that.
The recurring questions at annual meetings.
It depends entirely on your governing documents. Bare-walls associations leave fixtures, flooring, and cabinetry to the unit owner; all-in associations cover the original construction and sometimes improvements. The first thing we do is read the bylaws against the policy form.
Yes. Decisions about assessments, rule enforcement, and maintenance are regularly challenged, and directors can be named personally. D&O is also what makes it possible to find members willing to serve.
Often set by statute or by lender requirements tied to reserves and monthly assessments. It should also extend to any management company with access to funds, which is a gap we find frequently.
Yes. It is inexpensive on a personal policy and it protects members from a large surprise assessment. Boards that communicate this well have far fewer difficult conversations after a major loss.
Most association coverage disputes are settled — or created — by those two documents read side by side.
