Pennsylvania Homeowners Association Insurance. Homeowners associations (HOAs) have very unique insurance needs. Though the property faces the same risks and perils as other types of properties, the parties responsible for covering the various elements of the property differ.
All individual unit owners form the membership body of condominium, homeowners and townhouse associations. While condominiums can be commercial or residential homes, townhouses are generally residential only. Each individual unit owner owns a particular unit, then each has a shared financial responsibility for the overall maintenance and upkeep of common areas, such as clubhouse, the grounds, elevators, exterior walls, foundations, hallways, HVAC systems, outside fixtures, parking areas, recreational facilities, roofs, and swimming pools. The association's bylaws will state exactly what is owned by each individual member and what is owned by the association.
The unit owners either elect or hire association leadership to coordinate common maintenance and upkeep activities. The association’s officers are responsible for hiring employees or contracting with others to provide the needed services. The officers are also responsible for administrative operations, including setting and enforcing rules for the association membership. The association is also responsible for the determination, collection and disbursement of any necessary assessments for maintenance, upkeep and insurance.
For example, each individual who lives within the community owns a portion of the building that he or she lives in. As such, residents are responsible for securing insurance coverage for their actual units; however, common areas, such as swimming pools, sidewalks, garages, walkways, and other shared spaces are the responsibility of the homeowner's association. This means that the HOA is responsible for insuring these shared spaces.
If you own a community that is governed by a homeowner's association, it is important that you understand the role of the HOA and what type of Pennsylvania homeowners association insurance coverage you need to secure.
Pennsylvania homeowners association insurance protects your HOA from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
A homeowner's association is an organization within a residential community that establishes and enforces rules that the property owners who live within the community must abide by. The association is not only responsible for making sure that rules are upheld, but also manages expenses for the community, makes repairs to common areas, and ensures that the property has the right type of insurance coverage in the event of a loss.
The HOA also establishes rules that are intended to govern the community. These rules also outline the insurance requirements for the homeowner's association, which includes the particular requirements for coverage for the community, including the types of coverage, the coverage limits, and the deductibles, that the HOA is required to purchase.
The HOA insurance covers the shared risks of those who own units within the community. All of the buildings and the common spaces within the community are covered under a single policy, known as a master policy. The rules that the association establishes and the master policy dictate which aspects of the complex the HOA insured and which parts those who own units within the community are required to insure.
With that said, the PA HOA will ultimately determine what type and how much Pennsylvania homeowners association insurance coverage is needed.
The master policy, which is the Pennsylvania homeowners association insurance policy, covers several things. Some of the most common things that are typically covered under this policy include:
The goal of a homeowners association is to ensure that the PA community it governs is safe and secure. That's why it's important for HOAs to purchase to make sure that they are properly insured.
Premises liability exposure comes from use of the communal areas as the association is responsible for all maintenance and upkeep. All buildings should meet life safety codes regarding smoke and fire detection, fire extinguishers, and carbon monoxide detectors. To prevent slips and falls, all premises must be well maintained.
There should be no frayed or worn spots on carpet, and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked with backup lighting systems in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Balconies should be regularly inspected and maintained.
Swimming pools, exercise facilities, and playgrounds should be limited to members and their guests and properly maintained. There should be a maintenance activity log to document the association's response to unit owners' needs. Personal injury losses may occur due to alleged discrimination or invasion of privacy.
Directors and officers exposure is from actions and decisions made by the elected officers of the association. The exposure can be minimal when all responsibilities are shifted to an outside management firm. If the association operates without outside assistance, the association and its individual officers can be held liable for adverse actions such as discriminatory practices, failing to maintain the property in a responsible manner, or mismanagement of shared escrow funds. Policies and procedures should be published and consistently followed.
Workers compensation exposure is nonexistent if the association contracts all services to an outside management firm. If there are employees, office workers may develop repetitive motion injuries such as carpal tunnel syndrome. Maintenance workers can experience cuts, burns, back sprains from lifting, and exposure to machinery used for lawn maintenance and other repairs.
Skin and lung irritations can result from working with cleaning chemicals and paint. Animals owned by unit owners can bite or kick workers. Any contract with outside firms must specify who is responsible for providing workers compensation coverage to the workers. If the subcontracting firm is responsible, the condominium association should obtain certificates of insurance to verify that coverage.
Property exposure consists of the buildings, grounds, swimming pools, parking areas, and other property jointly owned by the association's members. The bylaws of the association will specify what is owned by the association and how it must be insured. Ignition sources include electrical wiring, heating and air conditioning systems, and cooking equipment within residential units. There should be hard-wired smoke or fire alarms in all units and common areas. Personal property is limited to the office and furnishings in the community building.
Crime exposure comes from employee dishonesty in the handling of the escrowed funds to be used for maintenance and repair. Employee dishonesty is controlled through background screening, disciplined controls, and division of duties.
Inland marine exposure comes from accounts receivable for association fees and assessments due, computers, and valuable papers and records for association and owners' information. Duplicates of all records should be made and kept off premises for easy replication in the event of a loss. Lawn equipment may be considered contractors' equipment, but is usually included as building property.
Business auto exposure is generally limited to hired and non-owned for employees running errands. If a maintenance vehicle is owned by the association, all drivers must have licenses appropriate for the vehicles driven and acceptable MVRs. All vehicles must be maintained with records kept in a central location.
While you might have a fantastic idea for a business, if you aren't setting up shop in the right PA location, there's a good chance that you won't see the success that you hope to achieve. With that said, it's important that you have an understanding of the economic status of the state that you are thinking about doing business in. It's also important for you to know what type of rules and regulations regarding insurance are in place in that state.
If you are thinking about doing business in the Commonwealth of Pennsylvania, keep on reading to find out some valuable information that you can use to make the best choices for your operation.
In terms of the economy, Pennsylvania's future looks pretty bright. It boasts the sixth largest economy in the United States. It is also home to some of the largest private and public organizations in the nation, as per sales.
The job market is expected to see steady growth in Pennsylvania during the 2019 calendar year. That rate is expected to be 1 percent, which is a marked increase from previous years. This is largely due to the high pool of educated laborers that reside in the state. Currently the unemployment rate is 4.9 percent, which is on-par with the rest of the nation. It is believed that the unemployment rate will continue to drop as more jobs are added.
For business owners, there are several industries that will afford success. The food products industry, particularly related to agriculture, contributes largely to the state's economy. This is expected to continue moving forward throughout the 2019 calendar year. Other industries that are forecasted to see growth include:
If you are thinking about doing business in PA, working in one of these industries will likely afford you success.
The Pennsylvania Insurance Department regulates insurance in PA. Business owners are legally required to carry workers compensation insurance. This type of coverage is a must for any business that employs any W2 part-time or full-time employees, and for employees that are either hourly or salaried. You must also carry PA commercial auto insurance if you plan on using a vehicle to conduct anything related to your business.
While commercial liability insurance is not required in Pennsylvania, it is still a wise idea to invest in. This type of coverage will protect you from the cost of any lawsuits that could potentially arise.
Read up on small business commercial property insurance, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.
Rental property owners, real estate developers and property managers should keep an accurate survey of each property they own or that is in their care. This survey should include inventories of furnishings and equipment at those properties. These documents establish the extent of their insurable interest, facilitate the arrangement and placement of insurance and minimize controversy and confusion if a loss occurs.
Insurance coverage on property, general liability and professional or errors and omissions liability should be arranged and placed for every real estate and rental property risk.
The main goal of any commercial property insurance program is to protect the insured's real and business personal property. Buildings and their contents property usually represents a significant portion of its total assets, regardless of the size of the business. A commercial property program can provide the coverage you need if a loss should occur.
The ISO Commercial Property Building and Personal Property Coverage Form is an insurance industry standard that provides this needed coverage. As a result, it should always be reviewed and used as a benchmark for comparison when evaluating any commercial property coverage form.
This policy treats business personal property as more than just the contents of a building. When there is a limit of insurance on the declarations, property can be covered if inside the building or structure or within 100 feet of the building or premises and either in the open, or even in or on a vehicle.
There are many endorsements available to tailor the ISO Commercial Property Coverage Forms. Some are mandatory for all policies while others are mandatory for specific classifications and types of business. Others are optional and permit a standard form to be customized to meet a specific risk's coverage needs. Endorsements broaden, restrict, delete, modify, or add coverage.
These policies can provide the following additional coverages for small specific limits of insurance: debris removal, preservation of property, fire department service charge, pollutant clean up and removal, increased cost of construction and electronic data.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Contractors' Equipment, Fine Arts, Cyber Liability, Employment-related Practices, Automobile Liability and Physical Damage, and Stop Gap Liability.
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Also learn about Pennsylvania small business insurance requirements for general liability, business property, commercial auto & workers compensation including PA business insurance costs. Call us (267) 296-1099.