Condo Association Insurance Policy Information
Condo Association Insurance. If you are a part of a condominium association or you own a part of a condo, then you know how important it is to have insurance. A condo is a building that contains a number of individually owned apartments or houses. Although each person owns a part, there are parts of the condo that are shared.
Just as a typical home, many risks come with owning a condominium. This is why it's important to get condo association insurance to protect your property.
Condo association insurance protects your property from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked condo associations insurance questions:
- What Is Condo Association Insurance?
- How Much Does Condo Association Insurance Cost?
- Why Do Condominium Associations Need Insurance?
- What Type Of Property Insurance Do Condo Associations Need?
- What Type Of Liability Insurance Do Condominium Associations Need?
- What Does Condo Association Insurance Cover & Pay For?
What Is Condo Association Insurance?
Condo Association Insurance, also known as Master Insurance or Master Policy, is a type of insurance that covers common areas and facilities of a condominium complex. This insurance policy is usually purchased and managed by the condominium association and provides coverage for common areas such as hallways, elevators, swimming pools, and other shared facilities.
This insurance protects the residents of the complex from any financial loss or damage caused by events such as fires, natural disasters, or other unforeseen circumstances. Condo Association Insurance typically covers property damage, liability, and other potential financial losses.
How Much Does Condo Association Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small condo associations ranges from $37 to $49 per month based on location, number of units, amenities offered and more.
Why Do Condominium Associations Need Insurance
A condominium owners' association is created to help with management of the building. Whatever the size of the property this association is required to assist in the administration of the expenses, repairs and ensuring that the buildings are secured with insurance.
These types of associations create rules that help to govern the operation of the buildings. The condo association insurance master policy outlines which parts of the property the association has insured and which parts the different persons who own units must get insurance to protect.
What Type Of Property Insurance Do Condo Associations Need?
An association master policy provides protection for the different parts of the condo such as hallways, sidewalks, elevators, roofs and basements of the condo building. As a unit owner, you are responsible for protecting your part of the condo.
With condo association insurance you are provided with three types of building coverage, and they include:
- Single entity coverage: This coverage helps to protect the basics elements of the building. It also covers standard finishes inside each of the units. However, it does not cover the personal property of the unit owner. To protect your personal property, you'll have to get separate insurance.
- Bare walls coverage: With this condo association insurance coverage, you also cover the essential building elements. This insurance also provides coverage for parts of the building such as walls, roof, floors, and elevators. As a unit owner, you'll have to get separate insurance for items such as bathrooms and kitchen fixtures, flooring, countertops and the other parts of your condo.
- Modified single entity coverage: Also known as all-in coverage covers improvements made to your condo. It includes fixtures, installations and any improvements you make to inside your of the condo.
Hurricane of Flood Insurance : Hurricane and flood insurance gives you the protection you need in the event a storm hits your condo. The damage caused by floods or hurricanes are usually not a part of your association master policy. This means you will have to get this coverage separately.
What Type Of Liability Insurance Do Condominium Associations Need?
Your condo association insurance should cover lawsuits. Something as simple as a slip or fall could result in a devastating loss from a lawsuit. If the property has a pool, hot tub or other shared places, then the chances of bodily injury are even higher, which requires you to have the right condo association insurance. Following are some of the most common coverages for condominium associations:
General Liability Insurance: With this type of condo association insurance, you can get broad coverage for any accident that can happen on your complex. If someone comes to your condo and they slip and get injured the association can be sued for any damages.
Crime and Fidelity Coverage: If there is theft of association funds or another type of financial theft then having this insurance provides you with the necessary protection.
Equipment Breakdown Coverage: This type if insurance covers any costs associated with the breakdown of machinery. When machinery breaks down, you stand the chance of losing income. By having this type of insurance, you can keep your business running.
Directors and Officers Liability Insurance: With this condo association insurance protection, the directors of the condo association are covered against lawsuits. A director's performance on the board could result in a lawsuit. As a director, you are responsible for making important decisions which you can be held liable for.
Condominium Association's Risks & Exposures
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 condominium association. The exposure can be minimal when all responsibilities are shifted to an outside management firm. If the condo association operates without outside assistance, the condo 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 condo 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 condo 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 condo 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 condominium 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 condominium 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.
What Does Condo Association Insurance Cover & Pay For?
Condo associations can be sued for various reasons, some of the most common reasons include:
Property damage: Condo associations can be held liable for property damage that occurs on common property or in common areas. For example, if a visitor slips and falls in the common area and sustains an injury, the association may be sued for damages. The association's liability insurance policy can provide coverage for property damage claims. If a visitor sues the association for injuries sustained in a common area, the policy can help pay for legal fees and damages awarded.
Breach of contract: Condo associations can be sued for breach of contract by residents, vendors, or contractors. This can occur if the association fails to fulfill its obligations as outlined in a contract. The association's directors and officers (D&O) insurance policy can provide coverage for claims related to breach of contract. If a vendor or contractor sues the association for breach of contract, the policy can help pay for legal fees and damages awarded.
Discrimination: Condo associations can be sued for discrimination if they violate fair housing laws by discriminating against residents or prospective buyers based on their race, religion, gender, or other protected characteristics. The association's liability insurance policy can provide coverage for discrimination claims. If a resident or prospective buyer sues the association for discrimination, the policy can help pay for legal fees and damages awarded.
Mismanagement: Condo associations can be sued for mismanagement if they fail to properly maintain the property or fail to make necessary repairs, which can lead to injury or property damage. The association's D&O insurance policy can provide coverage for claims related to mismanagement. If a resident sues the association for failing to make necessary repairs, the policy can help pay for legal fees and damages awarded.
Overall, insurance is an essential tool for condo associations to protect themselves from lawsuits and financial losses. However, it's important for associations to carefully review their insurance policies and understand their coverage limits and exclusions to ensure they have adequate protection.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8641 Civic, Social, and Fraternal Associations, 6531 Real Estate Agents and Managers
- NAICS CODE: 813990 Other Similar Organizations (except Business, Professional, Labor, and Political Organizations)
- Suggested Workers Compensation Code(s): 9012 Building or Property Management - Property Managers and Leasing Agents & Clerical, Salespersons, 9015 Building or Property Management - All Other Employees
8641: Civic, Social, and Fraternal Organizations
Division I: Services | Major Group 86: Membership Organizations | Industry Group 864: Civic, Social, And Fraternal Associations
8641 Civic, Social, and Fraternal Organizations: Membership organizations engaged in civic, social, or fraternal activities. Membership sports and recreation clubs are classified in Industry Group 799, and insurance offices maintained by fraternal organizations are classified in Insurance, Major Group 63. Homeowner, tenant, and condominium associations primarily engaged in managing real estate are classified in Real Estate, Industry 6531.
- Alumni associations and club
- Bars and restaurants owned and operated for members of
- Booster clubs
- Business persons clubs, civic and social
- Civic associations
- Community membership clubs, other than amusement and recreation
- Condominium associations, except property management
- Fraternal associations, other than insurance offices
- Fraternal lodges
- Fraternities and sororities, except residential
- Homeowner associations, except property management
- Parent-teacher associations
- Singing societies
- Social club, membership
- Tenant associations, except property management
- University club
- Youth associations, except hotel units
6531: Real Estate Agents & Managers
Division H: Finance, Insurance, And Real Estate | Major Group 65: Real Estate | Industry Group 653: Real Estate Agents And Managers
6531 Real Estate Agents & Managers: Establishments primarily engaged in renting, buying, selling, managing, and appraising real estate for others.
- Agents, real estate
- Appraisers, real estate
- Brokers of manufactured homes, on site
- Brokers, real estate
- Buying agents, real estate
- Cemetery management service
- Condominium managers
- Cooperative apartment manager
- Escrow agents, real estate
- Fiduciaries, real estate
- Housing authorities, operating
- Listing service, real estate
- Managers, real estate
- Multiple listing services, real estate
- Real estate auctions
- Rental agents for real estate
- Selling agents for real estate
- Time-sharing real estate: sales, leasing, and rentals
Condo Association Insurance - The Bottom Line
As an owner of a condo unit, it's important that you find the right protection. With association master policy some things are covered in the condominium building. You, on the other hand, may need to get additional insurance for your part of the condominium. When you get insurance for your condo, you are protecting your investment.
Additional Resources For Commercial Property Insurance
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.
- Apartment Building
- Business Interruption
- Commercial Flood Insurance
- Commercial Property
- Condo Association
- Contractors Equipment
- Duplex Rental Property
- Equipment Breakdown Protection Insurance
- Homeowners Association Insurance
- Inland Marine
- Jewelers Block
- Manufacturing And Mercantile Rental Property
- Mobile Home Park
- Non-Residential Building Operators
- Office Buildings
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
- Specialty Habitational
- Specialty Inland Marine
- Specialty Property
Commercial property insurance is a type of insurance that provides coverage for businesses against losses or damages to their business property. This can include buildings, equipment, inventory, and other assets owned by the business.
There are several types of commercial property insurance, including standard property insurance, business interruption insurance, and contents insurance.
- Standard property insurance covers damages to the physical structure of the business, such as the building, walls, and roof.
- Business interruption insurance covers lost income and expenses incurred during the repair or rebuilding process.
- Contents insurance covers damages to personal property within the business, such as office equipment and furniture.
Commercial property insurance is important for businesses of all sizes, as it helps protect against financial losses due to unforeseen circumstances, such as natural disasters, theft, or vandalism. It can also provide liability coverage in case of accidents or injuries on the business property.
To determine the appropriate level of property insurance for a business, it is important to consider the value of the business's assets, the location of the business, and the potential risks it faces. Many businesses choose to work with an insurance agent or broker to help identify the best coverage options for their specific needs.
Overall, commercial property insurance is a crucial part of any business's risk management strategy, helping to protect against financial losses and ensuring the long-term viability of the business.
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.