Are we covered?

Are We Covered? A Brief Guide to your Association’s Insurance Policy
- by Amy Rieger, ARM, CIRMS

When putting together your association’s insurance program, it’s important to understand what coverage the association needs and how it will protect you. The following is a brief overview of these important coverages.

PROPERTY
Provides first party coverage for the association’s property when damaged by a covered cause of loss. Most association policies written in the State of Washington are on an “All In” basis. It’s important to confirm this is the case with your insurance agent. All In - Includes coverage for common elements, limited common elements, property included in units and private storage areas and additions, betterments and improvements made at the expense of the unit owner.

GENERAL LIABILITY COVERAGE
Liability coverage insures against third party claims arising from alleged bodily injury or property damage to members of the public. The insurance company has the duty to defend the association against any claim which alleges injury or seeks damages regardless of whether the association is negligent.

DIRECTORS & OFFICERS LIABILITY
Directors and officers liability provides protection against claims alleging loss arising from mismanagement or wrongful acts.

A wrongful act means any breach of duty, neglect, error, misstatement, misleading statement, omission or other act done or wrongfully attempted by the association. Insured persons under the association policy should include the association; directors and officers, past and present (elected or appointed); employees; committee chairs and members; and other association members acting at board direction.

EMPLOYEE DISHONESTY (FIDELITY BOND)
Employee dishonesty coverage indemnifies the association for loss of money, securities, or any other property due to acts of fraud, dishonesty, forgery, theft, larceny, embezzlement, wrongful abstraction, or willful misapplication or misappropriation, or any criminal act. Coverage is provided only for the association's employees, unless it is specifically broadened. Directors and officers of the association and employees of the property management firm who handle association funds should also be covered.

AUTOMOBILE
If the association has no owned automobiles, non-owned and hired automobile coverage should still be secured. Often these coverages can be included on the master package policy.

An association’s insurance program can be confusing and overwhelming to many so use this as a tool for further exploration when reviewing with your trusted insurance professional.

Thank you Amy for your insights!

Please do not hesitate to contact us if you have questions or need assistance with your community management needs.

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