Amanda Schultze, New Business Underwriter, explains how to protect the board of directors with a D&O policy.
More and more community associations are requiring owners to maintain homeowner’s insurance. That’s necessary because the lack of insurance affects all parties involved, including other owners, the board of directors and the property management firm.
The issue we see is that some associations include verbiage that requires owners to maintain insurance but does not indicate what coverages and minimum limits that should be maintained. Even worse, some will only require Personal Liability Insurance.
With that in mind, here are the suggested coverages we feel each owner should maintain, along with a suggested minimum limit.
- $25,000 of Improvements or betterments also known as additions and alterations. Covers what an owner is responsible for within the unit.
- $25,000 of Personal Property. Covers the owners contents.
- $300,000 of Personal Liability. Covers damages caused by the owner because of their negligence. Also covers injuries inside or outside the unit.
- $10,000 of Additional Living Expenses. Covers expenses such as hotel room stays, rent or the cost to eat out while the unit is uninhabitable due to a covered peril.
- $10,000 of Loss Assessment. Covers assessments lodged by the board in the event they do not maintain adequate insurance. In order to be covered, the assessment must be due to a covered peril.
For more information, please contact us.