Condominiums present a unique insurance situation because each unit owner owns a portion of the building. But while there is shared ownership, the condominium association—the legal entity that oversees the management of the building—purchases the master insurance policy that covers general liability, common area property and possibly other optional protection.
Every condo association policy must cover two key risks: general liability and property insurance. General liability protects the association from claims for any injuries that occur to residents or guests in the common areas, such as hallways, pools and golf courses. Property insurance applies to all buildings, common areas and recreational structures, including pools and tennis courts. Should the property be damaged, business income coverage pays for all business expenses so bills can be paid while repairs are being made.
Beyond standard coverage, a number of other additional coverages are available for condo associations. First Baldwin Insurance can help you assess which protection is best suited for your community and its needs.
Add-on insurance protection for condo associations include:
- Directors and Officers Liability – Protects condo association officers and directors if sued in conjunction with their performance as association members.
- Demolition and Increased Cost of Construction – Covers various extra expenses incurred after a covered loss. For example, pays for extra expenses associated with bringing the building up to current code.
- Backup of Sewer and Drain – Pays for up to a specified dollar amount for damage related to sewer and drain backup. Not included in standard policies, but can be added as separate coverage.
- Hired and Non-Owned Auto – Extends auto liability protection for accidents during the use of personal vehicles for condo association business.
- Crime and Fidelity – Provides coverage for theft of association funds or other financial misconduct by an association member.
- Ordinance Coverage – to comply with legal or regulatory upgrades after loss.